Answer to Question #74332 in Macroeconomics for Eunice

Question

How do you include human capital in the Variable Elasticity of Substitution (VES) production function? Should human capital have its own coefficient?
This is the VES function with capital and labour as the only factors of production:

Y=〖AK〗^(ωφ ) [L+ ηωK]^((1-ω)φ)

Answer 1

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