The Lucas Growth Model 1 Setup ?

  title={The Lucas Growth Model 1 Setup ?},
  • Published 2015
1 Setup ? presents a growth model in which output is generated via a production function of the form Y = AK α (uhL) 1−α (1) where Y, A, and K are as usually defined and 0 < α < 1. The variable u is defined as the proportion of total labor time spent working, and h is what Lucas calls the stock of 'human capital.' The production function can be rewritten in… CONTINUE READING