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The economist Paul Romer argues the aggregate production function for the United States would be better written as Y = KL, where a has
The economist Paul Romer argues the aggregate production function for the United States would be better written as Y = KL, where a has a value between 0.7 and 1.0 and has a value between 0.1 and 0.3. (a) In class we discussed the productivity slowdown the U.S. economy has experienced since the early 1970s. Could Romer's production function explain this productivity slowdown? Please clearly explain. (b) Do you think the values for would be larger or lower in developed countries compared to developing countries? Please explain.
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