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The aggregate depreciation rate may be higher today than in the past because the share of intangible capital in the capital stock has been on
The aggregate depreciation rate may be higher today than in the past because the share of intangible capital in the capital stock has been on the rise. Using the Solow model, explain the effects of an increase in depreciation rate on capital and output per person in the long run. How would your answers change if you were told that the use of intangible capital also enhanced aggregate productivity (i.e., the term A in Solow's model)?
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