Explain The Aggregate Production Function Of The United States?

Now that we have examined the principles of production theory, we can apply these theories to measure how well the whole U.S economy has been forming. To do this, we need to look at what's happened to total output, to the quantity of inputs like labour, capital and land, and to total productivity. Because they involve serious problems of measurements, all such magnitudes must be calculated with great care. Yet they are useful in giving a broad description of an economy's overall behaviour.
Empirical studies of the aggregate production function date back to the 1920s, when Paul Douglas a professor at the University of Chicago and later a U.S senator analysed data for manufacturing. Over the last 30 years some of the best minds of economic have examined this subject, including John Kendrick, Edward Denison, Robert Solow a winner of the Nobel Prize in economics for his work in this area, and Dale Jorgenson. The goal of these studies was to understand how economic growth depends upon capital, labour and productivity growth. Recall from our earlier things that productivity measures the total quantity of output per unit of input. Productivity growth denotes the rate of growth of the level of productivity. For example, if output per worker is 100 units in 1996 and it grows to 102.5 units in 1997, we say that productivity growth was 2.5 percent per year.

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