Recall that when we have constant returns to scale, then we can express a production function Y = ¦ (K, L) in intensive form as y = f (k), where y = Y/L and k = K/L We also know that ¦ K = f k and ¦ L = y f k k Thus, ¦ L /¦ K = (yf k k)/f k As a result, the elasticity of substitution can be written in intensive form asY/L = AF (1, K/L, H/L, N/L) Y/L = productivity per worker Economic Growth and Public Policy Standard of living depends on productivity which depends on K/L, H/L, N/L, A What can government do to raise productivity?Y = AF (K, L) (i) Where Y is Gross Domestic Product (GDP), K is the stock of capital, L is the amount of unskilled labour and A is exogenously determined level of technology Note that change in this exogenous variable, technology, will cause a shift in the production function Solved Growth Accounting 6 Marks Below Are Data On The Levels Of Aggregate Output Y Capital K The Amount Of Labour Working In Production Course Hero Y k lim series