Questions tagged [economic-growth]

An increase over time in the quantity of goods and services produced within an economy.

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Does a neoclassical production with constant returns to scale implies type of Cobb-Douglas

Assume the neoclassical production function $$F(K,L)\colon [0,\infty) \times [0,\infty) \to [0,\infty)$$ twice continuously differentiable, i.e., F is montone increasing and concave, i.e., $$ \partial ...
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Is is possible that two economies have the same real interest rate, same GDP growth, but different inflations?

This is just a conceptual thought experiment. Is it possible that two countries have the same real interest rate, same GDP growth, but different inflation, one higher, one lower? If that's possible, ...
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1 vote
1 answer
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Calculating population growth in logs

I want to approximate annual population growth using logarithms; that is, log(population at year 2) - log(population at year 1). Is it okay to use population in thousands, or in millions in these ...
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-4 votes
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Why other countries stock market fall during war between russia and ukraine

Why other countries stock market is falling during Ukraine Russia war. How does it affects others country's stock market.
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Indices with different base years - growth rate

When you know the growth rate of an index for a given base year, can you apply this exact growth rate to the same index for another base year? What is the formula to transform the same index into a ...
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3 votes
1 answer
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Solow residual with cost minimization, calculus (Roeger, 1995)

I am trying to get a good understanding of the steps involved in solving the dual of a maximization problem, namely cost minimization. At some point (last two steps), the author ends up with the ...
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0 votes
1 answer
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Unified growth theory optimization problem

I'm trying to understand the standard unified growth theory model as summarized on page 60 here: https://www.econstor.eu/bitstream/10419/80210/1/481894578.pdf;Unified The basic household optimization ...
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1 answer
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If LRAS shifts right, won't PPC also shift outward?

Hi, I was solving this question. Here are the answers: I am really confused about part (c) & part (d). My understanding is that when LRAS shifts right, the PPC will shift outwards, to show ...
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1 answer
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How to make a country rich with no ground resources?

I have heard from an interview with N. Chomsky that the British favored India to work their fields instead of creating the machines that are used in the fields, this is a form of economic supressesion ...
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Is there a response to Stagflation that isn't austerity?

A reason why Keynesian economics got discredited and replaced by the now dominant Washington Consensus, was because of the 1970's stagflaysh according to David Harvey: https://newlearningonline.com/...
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Does higher tax encourage high economic gowth?

Text in image: Which of the following is LEAST likely to be associated with a higher rate of economic growth? (A) strong protection of property rights (B) taxes on savings and investment (C) policies ...
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1 vote
1 answer
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Labor=1 in standard growth model

In every standard growth model, we suppose labor=1. I learnd that this is because optimization solution of labor is equal to 1. How to derive that optimazation solution? For example, consider that ...
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Countries whose currencies have changed

Countries whose currencies have changed Can you highlight the main reasons as why some countries have changed their currencies ? What will be the impact on their economy once they change their ...
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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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Why is equity trading an active contribution to the development and growth of economy?

How can one explain in a few words why equity trading is an active contribution to the development and growth of economy? At first sight it seems counter-intuitive (for the layman): Buying newly ...
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Can sanctions spur economic reforms?

Is there any evidence throughout history that economic and financial sanctions helped sped up structural reforms, particularly in countries whose economies were previously dependent on natural ...
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2 votes
1 answer
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Why is human capital per worker multiplied by wage per worker?

I am studying a paper entitled "The Past and Future of Knowledge-Based Growth" by Strulik et al (2013) where the budget constraint is written as: $$w_{t}h_{t}(1-\tau n_{t})=c_{t}^{1}+s_{t}+...
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5 votes
1 answer
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Solow Model with DRS and Human Capital

This is a self study question. I am novice at this and have only basic knowledge of solving such problems. \begin{align} Y &= AK^\alpha H^\beta \\ \dot{K} &= s_KY - \delta K \\ \dot{H} &= ...
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2 votes
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Can Autarky be prosperous?

In light of the recent economic sanctions on the Russian federation, I would like to know, if it is theoretically possible for a country like Russia, with a high level of natural resources and ...
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6 votes
2 answers
114 views

Where are the equations? Limits to Growth, Meadows et al., 2004

I'm specifically interested in the most recent World3-03 model from 2004. I was just wondering if someone knows how they actually derive their model or any of their predictions? I couldn't find any ...
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2 answers
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Is there a scenario where investment and interest rates could both be increasing

Is there a scenario where investment and interest rates could both be increasing? I know that lower interest rates lead to increase borrowing and thus increased investment spending. So there is ...
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Resources on hunger and sustainable development in India

I need some articles and papers on how hunger causes hurdle to sustainable development in India in the present day scenario. I am doing a research work on this topic. (I am new to this community. ...
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Growth Premium and Debt consolidation

I'm interested in country cases (e.g., Argentina or another EME) where there have been periods of high economic growth but worsening (or at least not improving) fiscal balances. This could be either ...
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Issue with Calculating Revenue Compound Monthly Growth Rate (CMGR)

I am trying to calculate the revenue compound monthly growth rate (CMGR) over a 12 month period of a hypothetical business whose net revenue shares a seasonality trend. Here is an example of data (...
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Recent Research Topics in Macroeconomics (Hopefully Growth Theory)

Im in my last year as undergraduate and i have the opportunity to make a tesis, i have strong foundations in econometrics and macroeconomics but I don't know what the latest research on macroeconomics ...
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4 votes
1 answer
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Proof of Saddle-Path Stablility in Ramsey-Cass-Koopmans model

I'm currently struggling to proof the saddle-path stability in the Ramsey-Cass-Koopmans model. Based on the books Introduction to Modern Economic Growth by D. Acemoglu (chapter 7 and 8) and ...
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2 votes
0 answers
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Natural regression to study rate of convergence from MRW (1992)

In the paper of Mankiw, Romer and Weil (1992: 422-423) aka MRW there is a transfer from theoretical dynamical model to empirical regression approach as follows. The model suggest a natural regression ...
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Reason behind unequal productivities of investment in different sectors, in the Feldman-Mahalanobis model?

In the model, production is divided into two sectors: the consumer goods sector and the capital goods sector. It is assumed that ratio of 'increment of income to the increment in investment in ...
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1 vote
1 answer
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Showing Growth rates are equal in BGP?

One feature of Balanced Growth Path is that growth rates are equal along it: Consider the following conditions: $y_t= Xk_t$ $y_t = c_t + i_t$ $k_{t+1} = (1-\delta)k_t$ From first equation it is easy ...
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Brexit impact data and forecasts

I am looking for some new studies (preferable from 2021) about the medium/long term impacts of Brexit, especially accounting for the TCA agreement. I know there are many papers about these topic, but ...
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1 answer
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Comparative statics of the Ramsey model, the effect of a change in population growth on the steady state capital-labor ratio

In Acemoglu's book "Introduction to Modern Economic Growth" there is Proposition 8.3 which states that the impact of a change in the population growth rate on the steady state capital-labour ...
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1 vote
1 answer
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Help to understand a Log-linearization and subsequent Differentiation with respect to time

I was reading the following paper: https://www.jstor.org/stable/2999442?seq=1#metadata_info_tab_contents At one point there are a couple of simple passages that however I did not fully understand. In ...
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-1 votes
1 answer
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Can economic models predict China overtaking the United States?

I recently read an article about China's economic progress: Chinese economy to overtake US 'by 2028' due to Covid Can models and simulations based on economic data predict when China's economy will ...
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0 votes
1 answer
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Derivation of Solow Growth Model (Solow, 1956)

In Solow's "A Contribution to the Theory of Economic Growth" paper, how do we go from this equation to such that Could you please give me a hint about that derivation?
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2 votes
1 answer
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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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0 answers
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How to draw a diagram like Solow model to prove growth rate in Harrod-Domar model won't converge?

Solow model defines income per capita function f(k)=F(K/L,1) with f'(k)>0 and f''(k)<0 and proves that there must be an intersection with (gL+gA+δ)k where growth rate converges. But it confuses ...
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2 votes
1 answer
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Why isn't economic growth defined in terms of the increase in national wealth?

Economic growth is defined as the increase in production or output per unit time. Why isn't it instead defined in terms of the increase in national wealth?
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6 votes
1 answer
112 views

Inada Conditions for Intensive Form of Production Function

I want to show that the Inada conditions $\underset{K\rightarrow0}{\lim} \frac{\partial F}{\partial K}=\underset{L\rightarrow0}{\lim} \frac{\partial F}{\partial L}=\infty$ and $\underset{K\rightarrow\...
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1 vote
1 answer
42 views

Economic growth in a DSGE model, despite mean-zero shocks

The DSGEs I've seen have steady-states, and mean-zero shocks. Can these predict growth in GDP / capital etc? Is this possible despite them being equilibrium models, or do you have to completely change ...
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1 answer
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Constant returns to scale and diminishing marginal returns in the Solow model

My introduction to economics course had a section on the Solow model which I'm revising for next year. I'm a little confused by two of the assumptions which our lectuer taught us are made by the Solow ...
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Idea Production Function References

I've read in growth theory about the Idea production function: $\dot{A}=f(A,S)$ which states that the change in ideas or blueprints or patents is a function of past ideas and the number of scientists. ...
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2 votes
1 answer
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Is there an economic argument against mass immigration?

(I know little about economics, so I'd appreciate an elementary explanation) Background for this question is that I was wondering what makes people say China's economy will keep growing while its ...
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1 vote
1 answer
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Why does HDI use log-transformed data for income index?

For calculation of HDI, the Income Index used is $\mathrm{I_{income} = \dfrac{ln(Income) - ln(min Income)}{ln(max Income) - ln(min Income)}}$. Why is the log transformed income used here? World Bank ...
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2 votes
2 answers
212 views

Does investing in the stock market contribute to economic growth?

I am morally opposed to economic growth: I think that for the good of our planet we need to be shrinking human impact in pretty much every way, not increasing it. If I invest in the stock market, I ...
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-1 votes
1 answer
108 views

Will economic discrepancy between democratic and authoritarian states decrease over time? [closed]

The most popular explanation for the economic discrepancy between different states is that in the authoritarian states the leaders need corrupt extractive institution to preserve their power. However, ...
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2 answers
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How should I regress income inequality on economic growth?

I would like to know which variables to use to regress income inequality on economic growth. For income inequality, I am thinking of using the Gini index, but don't know what measurement exactly. For ...
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7 votes
1 answer
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How to get this Production Function in Growth Rates

I'm struggling to understand how Khan & Reinhart (1990) go from the next production function. $$y=A f(K,L,Z)$$ Where $y$ is the production of the economy, $A$ is a variable which contains the ...
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2 votes
1 answer
61 views

Human Capital Vs TFP

I'm interested in familiarizing myself with some of the intra-debates that have occurred over the years, having to do with Mankiw, Romer, Weil (1992) and Klenow, Rodriguez-Clare (1997). Some argue ...
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1 vote
1 answer
36 views

Is GDP the market value of goods consumed or goods produced in a time period?

Definitions across various resources state that GDP is the market vaue of all goods 'produced' in a certain time period. But while calculating GDP by expenditure method, consumers' spending is one of ...
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2 votes
1 answer
172 views

Measuring growth rate when values are negative

I am studying nightlights data and trying to model cross-sectional convergence in nightlights in India. However data has some stray light corrections, which has made some of the measurements below ...
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