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We know that the growth rate of living standards depends on the growth rate in technology/innovation in the long run. Picture a scenario where there
We know that the growth rate of living standards depends on the growth rate in technology/innovation in the long run. Picture a scenario where there is a temporary reduction in labor that is dedicated to innovation/knowledge/new technology LA(t). After some time, LA(t) returns to its normal level. Will the temporary reduction in this labor devoted to innovation cause a change in the living standards Y(t)/L(t)?
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