Suppose that the production function is given by Y=F K, N=A Ka L1-a Where a<1, Y denotes the output, K denotes the capital, N denotes the labour, and A denotes the technological progress. Let ga be the growth rate of technological progress (A), gn be the growth rate of labor (N), and 6 be the rate of depreciation in this economy. Prove that growth of output per worker (gy) is equal to growth of technological progress plus increases in capital per worker [Hint; gy=ga+ a times growth rate of capital per worker)

Suppose that the production function is given by Y=F K, N=A Ka L1-a Where a<1, Y denotes the output, K denotes the capital, N denotes the labour, and A denotes the technological progress. Let ga be the growth rate of technological progress (A), gn be the growth rate of labor (N), and 6 be the rate of depreciation in this economy. Prove that growth of output per worker (gy) is equal to growth of technological progress plus increases in capital per worker [Hint; gy=ga+ a times growth rate of capital per worker)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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