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Labor compensation as a fraction of output

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Reference no: EM131224497

Consider the continuous time version of the Solow growth model : Y (t) =K(t)α(A(t)L(t))1-α

If capital share α increase, will the labor compensation as a fraction of output WL/Y must fall?

Explain intuitively whether or not this must be the case.

Reference no: EM131224497

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