In this chapter, the theoretical model is translated into an econometrically testable linear expression. In Sect. 8.1, it is shown how a Taylor approximation of the production function’s derivative with respect to time results in a differential equation, the solution of which is given in Sect. 8.2: after a considerable number of equations, the model’s complexities are reduced into one linear equation with clear conclusions. Finally, in Sect. 8.3, the model’s implications are summarised in connection with an outlook to possible extensions and future research.
Human Capital Output Growth Physical Capital Labour Unit Taylor Approximation
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