<p>Nominal output is simply P*Y. Usually, with the Solow model you are interested in real quantities, i.e. the number of goods produced. The intensive form of the production function is obtained by divided through by labor, you would get y = f(k), where y = Y/L and k = K/L.</p>

CC BY-SA 4.0
2018-05-04T21:41:16.800Z
2018-05-04T21:41:16.800Z
Immo
<p>I just have one answer :
You take into account the real wage cause you want to simplify the model. If you put the inflation then the model will have the Cost Inversion ( which have the inflation).</p>

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2018-05-04T04:17:35.007Z
2018-05-04T04:17:35.007Z
Miguel Gutierrez
<p><a href="https://i.sstatic.net/8YFbd.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/8YFbd.png" alt="enter image description here"></a></p>

<p>Some help with this would be appreciated. </p>

<macroeconomics><production-function>
Production function question
holly
# Production function question

(Asked by: username_0 on 2018-05-03)

[![enter image description here](https://i.sstatic.net/8YFbd.png)](https://i.sstatic.net/8YFbd.png)

Some help with this would be appreciated.

**Tags:** macroeconomics, production-function

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## 2 answers

### Answer by username_1 on 2018-05-04. Score: -1

Nominal output is simply P\*Y. Usually, with the Solow model you are interested in real quantities, i.e. the number of goods produced. The intensive form of the production function is obtained by divided through by labor, you would get y = f(k), where y = Y/L and k = K/L.


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### Answer by username_2 on 2018-05-04. Score: -1

I just have one answer :
You take into account the real wage cause you want to simplify the model. If you put the inflation then the model will have the Cost Inversion ( which have the inflation).


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