Macroeconomics 12th Edition by Rudiger Dornbusch ,Stanley Fischer,Richard Startz

Exercise 17

If, in the context of a standard production function, Y = F ( K , N ), where K represents physical capital and N represents raw labor, we were to interpret the Solow residual
as "technological progress," we would be in error. What, besides technological progress, would this residual catch How could you expand the model to eliminate this problem