Growth Model: output (Y), capital (K), Labour (L), and technology (A). The production function could be structured as: Y(t)=F (K(t), A(t)L(t)) where t denotes time In the production function, time t only affects K, L and A, and then indirectly influence the output. In other world, the change of output over time is only caused by the change of inputs in the production function. If there is an increase in technology, the productivity of capital K will increase (the capital-augmenting…
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