# neoclassical growth model

I’m trying to wrap my head around 2 aspects of the neoclassical growth model:

1. in a steady state, the GDP growth rate would = growth rate in total factor productivity divided by labor’s share of total factor cost + growth in labor force

I get why GDP growth depends on growth in total factor produtivity and on the growth in the labor force but why do we need to take the growth in the total factor productivity as a percentage of the labrp’s share of total factor cost?? What’s the logic here? Why not simply use the growth in total factor productivity?

1. also in a steady state, the rental price of capital is equal to capital’s share of total output divided by total capital

Same question here- I just don’t get the link between cap’s share of total output as a percentage of total capital? Whats this mean?

I dont know about the first one, but my guess to the second one is below. Would like to wait someone to give out the correct answers to both now

(2) alfa *Y/K=r. alfa is the %of the capital, Y is the total output. alfla*Y=share of the capital output. They use that amount divided by K which is the total capital to find out the marginal product of capital. Also, uncer the production function, we are assuming the number of workers and alfa remain constant, I think that is why we are not using the share of labor at all.

Anyone?