Answer to Question #282522 in Economics for Wis

Question

Using the standard production function, Y = f(K, L, R, T), and holding the resource base fixed, we can derive the result that: y - n = α(k - n) + t , where y = rate of GNI growth, n = rate of labor force (population) growth, k rate of growth of the capital stock, α capital elasticity of output (usually found to be constant), and t the effect of technological change (the Solow residual in empirical studies of sources of economic growth)

Show how the above result is obtained using the production function.

Answer 1

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