Questions tagged [balanced-growth]

The tag has no usage guidance.

Filter by
Sorted by
Tagged with
1 vote
0 answers
25 views

Stylized facts in macroeconomics [closed]

Max $E_0 \sum_{t=1}^{\infty}\beta^t u(C_t , L_t)=E_0 \sum_{t=1}^{\infty}\beta^t[logC_t-B\frac{N_t ^{1+\gamma}}{1+\gamma}]$ $Y_t=A_t K_t^{1-\alpha}(N_t X_t)^\alpha$ where $X_t$ is labor augmenting ...
user avatar
  • 11
0 votes
0 answers
36 views

Solow Model With Land as Factor

Given the production function: $$Y = K^\alpha (AL)^\beta R^{1-\alpha -\beta}$$. Where $L, A$ grow at exogenously given rates $n, g$ respectively. $R$ is land and is constant in supply and given that $\...
user avatar
  • 1,630
3 votes
1 answer
78 views

Balanced growth path with specific technology

Resource constraint: $Y_t =C_t +I_t $ CRS Production function: $Y_t =K_t^{\alpha} (N_t X_t )^{1-\alpha}$ Investment function: $I_t =\frac{1}{q_t}(K_{t+1} -(1-\delta)K_t )$ The labor-augmenting ...
user avatar
  • 109
2 votes
1 answer
36 views

Solow model response function

Consider a Solow model without technological progress so that the steady state $k^*$ occurs at $sf(k^*) = (n+\delta)k^*$ where $n$ is population growth rate, $\delta$ is capital depreciation rate and $...
user avatar
3 votes
3 answers
80 views

Proving a result In Jones (1999) "Growth: With or Without Scale Effects"

Jones (1999) builds his semi-endogenous growth model where output is produced with only one input, labour, in the following "research" function: $$ Y = A^\alpha L_Y $$ Labour is augmented with ...
user avatar
0 votes
1 answer
33 views

Wage Growth Rate in the R&D Model

I am trying to understand the R&D model and how to calculate the growth rate of wage in this model. There is no equation given, but it’s stated that : household income must equal total ...
user avatar
2 votes
0 answers
40 views

The maximum sustainable yield model: clarifications

I would like your help to understand the Maximum sustainable yield model. This is what I understood with some questions. We consider a population of individuals who are born, possibly reproduce ...
user avatar
2 votes
1 answer
85 views

Why are we using exp(.) as the functional form in the household maximization problem inside the RCK model?

Currently I'm studying the RCK model at my Advanced Macroeconomics I classes. A question arose almost immediately when I saw the utility function of a household in this model. The question is: why ...
user avatar
1 vote
1 answer
296 views

Why does capital initially reduce and then rise with an anticipated future decrease in taxes in the RCK model?

Consider the version of the RCK model where there is a government that runs a constant balanced budget. At $t_0$, the economy is in steady state, with constant tax $T_{old} > 0$ Then, at $...
user avatar
  • 1,200
2 votes
1 answer
134 views

Can saddle path not go through the origin in Ramsey model?

In my case, the utility function is CEIS and discrete, the production fuction is $f(k_{t})=k_{t}^\alpha$, the budget constraint is $f(k_{t})+(1-\delta)k_{t}=c_{t} + k_{t+1}$. I use Jacobian matrix and ...
user avatar
  • 131
2 votes
1 answer
65 views

Comparative Statics on Balanced Growth Path

It would be a silly question. In a model, I have found the BGP (balanced growth path) for all key variables. As expected, these variables are constant variables ; $$\mu^{BGP}=\frac{\alpha+\rho+\pi}{...
user avatar
1 vote
0 answers
447 views

How to Show That, on a Balanced Growth Path, Two Variables Grow at the Same Rate

If we are given that a variable is on a balanced growth path (for sake of argument we shall assume consumption), how do we show that another variable related to consumption (like capital or wealth) ...
user avatar
  • 1,548
4 votes
1 answer
538 views

Calculating Time to Balanced Growth Path

$\textbf{Model:}$ $$\underset{\{c_t,k_t\}}{max}\;\sum_{t=0}^\infty\beta^t\frac{c_t^{1-\gamma}}{1-\gamma}$$ $$s.t.\;c_t=Rk_{t-1}-k_t$$ $$c_t,k_t\geq0$$ At time $t$, $c_t$ is consumption and $k_{t-1}$ ...
user avatar
  • 1,548
4 votes
1 answer
426 views

Balanced Growth Path (Qualifier Question)

$\textbf{Full disclaimer:}$ I am studying for my candidacy exams and this question is from one of the exams last year. $$max\;\sum_{t=0}^\infty \beta^t \frac{c_t^{1-\gamma}}{1-\gamma}$$Subject to the ...
user avatar
  • 1,548