Questions tagged [economic-growth]
An increase over time in the quantity of goods and services produced within an economy.
318
questions
4
votes
2answers
2k views
Is investment in real estate a real investment?
In the book The Financial Crisis and the Free Market Cure in chapter 3 author said that investment in real estate is not really investment.
It is jobs that create ...
0
votes
0answers
8 views
Could you guys recommend lecture notes or papers that show the step by step of the uzawa-lucas growth model?
I have to study the differences between the model of uzawa-lucas, solow and harrod-domar, so if you guys could reccomend me something to study the uzawa-lucas model, with an easy lecture notes to ...
2
votes
1answer
39 views
Models with Learning by Doing and Knowledge Spillovers - Barro, Sala-i-Martin (2003)
Consider the model of endogenous growth with learning by doing and knowledge spillovers presented in Barro & Sala-i-Martin (2003), chapter 4, section 4.3, starting in page 212. In equilibrium, the ...
3
votes
3answers
58 views
Theoretical economy calculation of closed country
Is there any well-known theoretical solution to the problem as described below? I am considering an ideal very simplified case.
There is a closed country/community of N people. All people are working. ...
0
votes
0answers
27 views
When is the upward economic convergence in the EU estimated to happen?
Although the regional cohesion, i. e. the socio-economical convergence of the East and the West has been one of the EU's main goals, some economists seem to dispute there's any evidence for them being ...
0
votes
1answer
58 views
Why, theoretically, is economic growth exponential? [closed]
Despite the experimentally well-observed exponential nature of GDP growth, I've never actually seen a theoretical reason or "prediction" why it should be so.
(Even if the answer is "...
1
vote
1answer
24 views
Are business cycle fluctuations usually studied in a (New Keynesian) DSGE model, or can they also be studied in a growth model?
I wonder if business cycle fluctuations are usually studied in a (New Keynesian) DSGE model, or can they also be studied in a growth model?
0
votes
1answer
37 views
How to determine a corner solution? Growth Model
I'm working on a paper called "Fertility clubs and economic growth" of Ahituv and MOav (linked below) and arrived at this point:
The paper shows three optimal conditions respect to ...
2
votes
1answer
36 views
AR(1) in Discrete Version of Stochastic Growth Model
If I assume a stochastic growth model in discrete time and the production function is defined as $F(K_{t}(s^{t-1}), L_{t}(z^{t}))$ where $z^{t}$ is history of the technological shock up to time $t$. A ...
0
votes
1answer
27 views
Calculating Per Capita
This is in reference to https://fred.stlouisfed.org/series/M2
My question is how can i calculate the M2 value on per capita basis? Do i just divide it with the population by year?
1
vote
0answers
21 views
Is there contradiction between ''job creation“ and ”growth" as implemented by automation?
Joint goals of job creation and sustainable growth are the main goals of majority of EU funding schemes. E.g. European Innovation Institute explicitly states in its mission https://eit.europa.eu/who-...
3
votes
1answer
41 views
Neutral technical progress
Recently I learnt that Cobb-Douglas production function has elasticity of substitution equal to 1, therefore it has neutral technical progress. Then Leontief production function has zero elasticity of ...
1
vote
1answer
22 views
Theory behind financial flows not going to the most developing nations even though they have the highest growth rates
I remember reading a bunch of articles on this a few years ago, but I can't find any of the references any more.
It has been a while since I looked at this, so here is a rough paraphrase of the ...
1
vote
1answer
39 views
Does Direct Benefit Transfers make an economy poorer?
Printing money and giving to the poor causes inflation.
Increases demand and hikes prices. This is basically certain.
But on the contrary, a paper titled Debunking the Stereotype of the Lazy Welfare ...
36
votes
10answers
8k views
Why do we need to “get the economy moving again”?
Sorry I have no background in economics but as a computer programmer, I specialise in building models out of simple math and logic, so I hope we can speak the same language without having to get into ...
2
votes
4answers
231 views
How can people save in a equilibrium economy?
Two people on a desert island:
John produces 100kg potatoes and sells them to Paul for \$100. Paul catches 100kg fish and sells it to John for \$100. GDP is \$200\$, right?
Next year, they improve ...
4
votes
2answers
55 views
“If markets are competitive, the rate of return on capital equals its marginal product, $f'(k)$ minus depreciation $\delta$”?
Consider Solow model with $Y=(AL)^{1-a}K^a$. Then output per effective labor is $y=k^a$ where $k=\frac{K}{AL}$.
"If markets are competitive, the rate of return on capital equals its marginal product,...
1
vote
2answers
53 views
Is there any fundamental reason that output elasticity of capital $<1$ in general?
In Solow growth model, if one perturb the saving, there is convergence of old equilibrium capital to new equilibrium capital as investment breaking point capital is attractor.
However, in derivation ...
0
votes
0answers
23 views
In Solow growth model, increasing consumption drops production which should measure GDP?
Consider Solow growth model $Y=F(K,AL)$ where $A$ measures knowledge progress, $K$ is capital and $L$ is label. I have suppressed temporal dependence. I am going to assume $L$, $A$ grow exponentially ...
1
vote
1answer
58 views
What is the relationship between population growth and economic growth?
Population Growth is only one of several factors of influence on economic growth but it is not strictly necessary for the economy to grow. I have also heard of the term called the population bonus - ...
3
votes
3answers
73 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 ...
2
votes
1answer
81 views
Research question formation
I am in the process of starting a research paper (for those in the IB Board, this is the Extended Essay) and I had previously formed my research question like this:
To what extent will factor x ...
1
vote
3answers
129 views
Where the economic growth of a society come from?
I'm thinking about value generating. I hear it a lot in a innovation context, i.e. one should create a new product that a lot of people want to buy.
I can see how a new product can value more than ...
0
votes
1answer
24 views
Is the steady state of k enough to show Y grows at the rate n+g?
To provide some context for the question: I was approached by a student needing help for a an empirical thesis based on Solow-Swan model. She had trouble solving the theoretical model she wanted to ...
0
votes
0answers
21 views
Calculating real wage in the previous year?
If in the base year the real wage is $.489, inflation in previous year was 5.8% and total wage growth was 13.5%, what was the real wage one year ago?
I know at the base nominal wage = real wage. Thus,...
1
vote
0answers
6 views
Implications for Labour after a Productivity Shock, RBC Model
I am trying to understand the implication for labour after a one time productivity shock where $A_t$ follows a AR (1) process with persistence $\rho_A=0.95$. It is stated the following : labour ...
0
votes
1answer
28 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 ...
0
votes
0answers
30 views
Ramsey Model and Transversality Condition
I am trying to understand the intuitive interpretation of the TVC.
I have two expressions from two different household optimisation problems that should be actually similar or equal intuitively as ...
0
votes
0answers
13 views
How do I convert change over a ten-year period into annual growth rate?
I am working on an econometrics project where I need to find the impact of climate change on agriculture in India. The project requires me to use an existing econometric model from some peer reviewed ...
1
vote
0answers
13 views
New Keynesian Model Output Gap and Calibration
I am trying to solve following problem regarding the New Keynesian Model:
So, I have calculated following equations by using the Taylor Rule, Phillips Curve and IS Curve:
$$\pi=\frac{\kappa\phi_y}{(1-...
2
votes
1answer
58 views
Log linearising EUler equation
I am trying to solve a problem that asks to log linearise following Euler equation of the New Keynesian model:
$$C^{-\sigma}_t=\beta E_tC^{-\sigma}_{t+1}(1+i_t)/(1+\pi_{t+1}).$$
The solution is ...
0
votes
0answers
19 views
Elasticity of substitution, marginal rate of substitution and price ratio
so there is a problem I do not know how to tackle:
The is an utility maximisation problem and the solution to the Lagrangian leads to:$$\frac{C_1}{C_2}=(1+\rho)^\frac{1}{\sigma}(\frac{P_1}{P_2})^\...
0
votes
1answer
17 views
Endogenous Growth in the case of externalities (Learning by doing)
so for the Learning by doing model productivity is defined as $$A_t=BK_t$$.
Inserting this into the optimum conditions leads us to the following:$$r_t=\alpha BL^{1-\alpha}$$ and $$w_t=(1-\alpha)B^{1-\...
0
votes
0answers
30 views
Ramsey Model Market Clearing Condition
I have a problem understanding the market clearing condition for aggregated equilibrium in the Ramsey model.
Market clearing implies that all resources are used up, hence: $Y_t=C_t+I_t$ , where $Y_t$ ...
0
votes
1answer
21 views
Difference between Luxury/Premium/Value fashion segments? What does “value” mean here?
I was reading this article on Quartz: https://qz.com/1485141/just-20-fashion-companies-are-making-almost-all-of-the-industrys-profits/
I do not understand the following graph shown:
What does "value"...
2
votes
1answer
46 views
FDI - Foreign Direct Investment
If foreign direct investment (FDI) in a sector is not stable, for example, if it increases dramatically one year and then declines the following year. If the fluctuation continues over ten years, what ...
1
vote
2answers
49 views
Does the US Bureau of Economic Analysis use the generic growth formula to calculate percent change of GDP?
My question is so basic, I'm embarrassed to ask it. (I study computational theory, not economics.) I'm looking at quarterly GDP numbers and growth rates. I've tried to arrive at the BEA's CPGDPAI ...
0
votes
1answer
26 views
How can autonomous private spending change budget surplus?
I was reading Keynesian economics in R.Dornbusch's book where he mentioned the defects of using budget surplus as a measure where he says it can be changed and effected by autonomous private spending ...
0
votes
0answers
32 views
Which model gives a more accurate representation of growth?
Does the Solow model or the combined Romer - Solow model give a more accurate representation of growth?
0
votes
1answer
26 views
Interaction between productivity growth and interest rates
Isabel Schnabel, Member of the Executive Board of the European Central Bank point at the interview out "The real interest rate (...) emerges from the economy’s growth potential in the long run.“ https:...
0
votes
0answers
18 views
Equilibrium in currency devaluation?
In export oriented Economy, we often come across currency devaluation as means to boost exports. As per my understanding (please correct me if I am wrong), currency devaluation will immediately bring ...
9
votes
4answers
2k views
Macroeconomics for Mathematicians
I'm coming from a math background (so my mind is set up for Definitions-Observation-Lemma-Proof frameworks) and looking for recommendations of a Macroeconomics textbook mainly devoted to growth models ...
1
vote
1answer
31 views
Understanding GDP vs Real GDP
I am totally new to Economics. I have issues understanding GDP and real GDP. I have listed 3 statements below, can someone tell me if those makes sense ?
GDP Gross Domestic Product is used to get an ...
0
votes
0answers
31 views
When does increasing government spending lead to economic growth and when does it lead to stagflation?
Obviously increasing government spending endlessly will lead to inflation. What I ask is: when can an increase in government spending, when the economy is in a recession, lead to economic growth ...
0
votes
0answers
20 views
Regarding global economic slow down
I heard in news that world is going through,the economic slow doing may be because of us China trade war or any other reason. and India is one of the country which affected by this slowdown, but ...
-2
votes
1answer
26 views
Steady state growth of output
In the long run Solow steady state, the growth rate of output in a country is g + n. If there is some other country with exactly the same properties of the first country and the same initial ...
-1
votes
1answer
46 views
Would a zero-growth economy with zero-growth population still have the same GDP?
If a country was to turn to a steady-state economy (or circular economy) where there is neither economic nor population growth with time, and there is no natural resources being added to the system ...
1
vote
1answer
55 views
In the long run, would a production-possibility curve expand outward if the country preferred more consumer goods than capital goods?
PPC will not expand outward if the country preferred more consumer
goods than capital goods.
The total amount of resources in an economy at any given point of time
is fixed. If a country ...
1
vote
2answers
60 views
What would happen to the world GDP if we run out of minerals to mine but not of sources of energy?
I was thinking about how the depletion of minerals (metals and all material we mine from the Earth) will affect the GDP of the world. I read somewhere that at the current extraction rate, we will run ...
0
votes
1answer
32 views
Does ownership determine efficiency in an economic system?
what determines efficiency in an economic system?
a) ownership
b) competition
c)both
d) none
I am confused between option (C) and option (B) because I am not sure about whether ownership can be said ...
