Asked • 05/28/19

Factor-augmenting technologies (Acemoglu and Restrepo 2018c)?

In that paper, they consider the following production function:$Y = F(A_KK,A_LL)$.Where: > K denotes capital, L is labor, and $A_K$ and $A_L$ denote capital-augmenting> and labor-augmenting technology, respectively. We assume throughout> that F is continuously differentiable, concave, and exhibits constant> returns to scale. Let $F_K$ and $F_L$ denote the derivatives of F with> respect to capital and labor. We focus on competitive labor markets,> which implies that the equilibrium wages is equal to the marginal> product of labor:$W = A_L F_L(A_KK,A_LL)$.Why? Shouldn't simply be:$W = F_L(A_KK,A_LL)$.Without the $A_L$ multiplying the derivative?

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