The coefficient on the growth rate of labor (0.72) in this equation is best interpreted as: A.

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The coefficient on the growth rate of labor (0.72) in this equation is best interpreted as:

A. the labor force participation rate.

B. the marginal productivity of labor.

C. the share of income earned by labor.

An economic forecasting firm has estimated the following equation from historical data based on the neoclassical growth model:

Potential output growth $=1.5+0.72($ Growth of labor $)+0.28($ Growth of capital)

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Economics For Investment Decision Makers

ISBN: 9781118111963

1st Edition

Authors: Sandeep Singh, Christopher D Piros, Jerald E Pinto

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Question Posted: Mar 09, 2024 11:02 AM

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The coefficient on the growth rate of labor (0.72) in this equation is best interpreted as: A.

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B The marginal productivity of labor The coefficient on the growth rate of labor 072 is best in...View the full answer

Economics For Investment Decision Makers

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