Questions tagged [solow]
Referring to the Solow-Swan model of economic growth.
3
questions
3
votes
3answers
6k views
Alpha interpretation in Solow growth model
Consider the Solow model (without technology):
$Y = F(K, L) = K^\alpha L^{(1-\alpha)}$
What's the economic interpretation of $\alpha$? Prove and argue the result.
I see it as a share that goes into ...
4
votes
2answers
2k views
Steady state Solow model with exogenous technological change
Consider the following question:
So, assume the standard function for production:
$$Y_t = A_t K^\alpha_tL^{1-\alpha}$$
where $L$ is fixed.
Then, the growth rate of output is:
$$g_Y \approx g_A + ...
1
vote
1answer
44 views
Would someone be able to help me solve capital per capita in the steady state (check my work)
Question: Suppose $C_t=(1-s)Y_t$ where $s>\sigma$ as in the basic Solow model. Solve for capital per capita in the steady state.
$Y_t=K^{\alpha}_tL^{1-\alpha}_t$
$Y_t=C_t+I_t+G_t$
$K_{t+1}=I_t+(1-\...
