Tech.progress in the Solow model A new variable:E=labor efficiency Assume: Technological progress is labor-augmenting: it increases labor efficiency at the exogenous rate g. △E E CHAPTER 5 Economic Growth ll slide 5CHAPTER 5 Economic Growth II slide 5 Tech. progress in the Solow model ▪ A new variable: E = labor efficiency ▪ Assume: Technological progress is labor-augmenting: it increases labor efficiency at the exogenous rate g: E g E  = 1