# Questions tagged [balanced-growth]

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### balanced growth path clarification and why wage rate and consumption on BGP have same growth rate

We say the economy converges to a balanced growth path if all variables are growing at a constant rate. But what does it mean? For example in Solow model with production function $F(K_t,A_tL_t)$ where ...
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### What would happen if we had decreasing returns to scale in the solow-swan growth model? Would there still be a steady state and perfect competition?

I understand with IRS we have explosive growth and a single firm would eventually dominate the market since MC < AC, and hence P < AC, so firms would leave the market. I am struggling to find ...
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### Sustained growth in Ramsey model

It is known that in the classical Solow model that if we use CES production function instead of Cobb Douglas function, it is possible to have sustained growth if the substitutability is larger than 1. ...
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### Balanced growth path in the Hicks neutral technology and CES function

In an another post (Balanced growth path definition in the Hicks neutral steady state with technology), the problem of having a not stationary steady state in a Solow model with Hicks neutral ...
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1 vote
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### Balanced Growth Path in a 3-Sector Economy

I'm going over a past paper for a macro course I'm taking and have gotten stuck on the last part of one of the questions. Suppose we have a three-sector economy. We are given $B_a,B_s>0$, a ...
1 vote
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### 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 ...
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### 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 ...
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