Questions tagged [balanced-growth]
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In Solow model, on the balanced growth path, why aren't wages zero?
According to this primer on the Solow Growth model, wages are equal to $w = \frac{\partial Y}{\partial L} = A \left(f(k) - f^{\prime}(k)k\right)$.
In the balanced growth path we know that $\dot{k} = 0 ...
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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 ...
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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 $\...
- 1,705
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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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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 $...
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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 ...
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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 ...
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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 ...
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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 ...
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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 $...
- 1,220
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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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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 ;
$$\mu^{BGP}=\frac{\alpha+\rho+\pi}{...
- 2,115
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How to Show That, on a Balanced Growth Path, Two Variables Grow at the Same Rate
If we are given that a variable is on a balanced growth path (for sake of argument we shall assume consumption), how do we show that another variable related to consumption (like capital or wealth) ...
- 1,558
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Calculating Time to Balanced Growth Path
$\textbf{Model:}$
$$\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$$
At time $t$, $c_t$ is consumption and $k_{t-1}$ ...
- 1,558
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Balanced Growth Path (Qualifier Question)
$\textbf{Full disclaimer:}$ I am studying for my candidacy exams and this question is from one of the exams last year.
$$max\;\sum_{t=0}^\infty \beta^t \frac{c_t^{1-\gamma}}{1-\gamma}$$Subject to the ...
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