The tag has no usage guidance.

32 questions
Filter by
Sorted by
Tagged with
14k views

### Solow Model: Steady State v Balanced Growth Path

Okay, so I'm having real problems distinguishing between the Steady State concept and the balanced growth path in this model: $$Y = K^\beta (AL)^{1-\beta}$$ I have been asked to derive the steady ...
238 views

### Optimality of Zero Capital Taxation

The Chamley-Judd result of zero optimal capital taxation says that 0 capital taxation are required in order to maximize welfare at the steady state. The result is 30 years old. Still assuming that ...
160 views

29 views

### Derive the Demographic Structure in the Steady State

I am reading a paper with following description on the demographics in their model: "... each (representative) agent lives for $T$ periods ... We assume that each individual has $e^{f}$ children ...
62 views

Consider the growth model with inelastic labor supply, full depreciation, log utility and CRS technology with the Bellman equation be defined as follows: $$V(k)=\max(log(k^\alpha-k')+\beta V(k'))$$ st ...
157 views

### Overlapping Generations model: Social Planner solution

Assume we have a model of OVG where there are 2 overlapping generations, youngs and olds, the agents are two period living. The utility function is logaritmic, and the production function is Cobb-...
182 views

### What conditions must we demand for the economy to be always on the saddle path?

Is it enough to assume that agents have perfect foresight, or have 'rational' expectations for the economy to always - except in few cases - be in the stable saddle path? With rational expectations, ...
29 views

### Get empirical steady state moments for calibrating a DSGE model

I want to calibrate some parameters of my DSGE model so that in the steady state some variable ratios, that are present in data, are met. My question is, how do I get such ratios from time series ...
299 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 ...
2k views

### Solow Model, Growth rate of K/L and Y/L in steady state

I have been given the following setup: $$Y=K^\theta (AL)^{1-\theta }$$ Where Y = Output, K = Capital, L = Labour and A = Productivity. $$\frac{\dot{L}}{L} = n$$ $$\frac{\dot{A}}{A} = g$$ The ...
43 views

### Difference between long run coefficient and non stochastic steady state coefficient ARDL model

I am a little bit confused on the definition of long run equilibrium coefficient. Suppose I have an ARDL model as: $y_t = \rho_1 y_{t-1} + \rho_2 y_{t-2} + \beta_1x_{t-1} + \beta_2x_{t-2}$ The steady ...
1k views

### What does steady state mean?

I am reading a book on business cycle models, and it keep using the word "steady state". It never defined what that actually means. Obviously it is the idea that some key variables reach constant ...
49 views

### Constant to the power of t in steady state

I am wondering how to get the steady-state for the following Euler equation. I know that we can get rid of time in subscripts. However, here I have a constant (a) to the power of $t$. Does anyone know ...
518 views

### Taylor Series Approximation around steady state in Solow

In my Advanced Macro script, the professor says take TSA1 of the following equation: $(1+g)(1+n)k_{t+1} = sk^\alpha_{t+1} + (1-\delta)k_t$ where $g$ is technological progress, $n$ population growth, ...
373 views

258 views

### Solow model golden rule with my exact answer

In a perfectly competitive Solow economy with physical capital accumulation, population growth and a Cobb-Douglas production function, show that the “golden rule” steady-state would be reached if at ...
814 views

### How to determine the Steady State of this model?

Consider the system of two equations: $$y_t=\beta\mathbb{E}_t[y_{t+1}+\gamma\cdot z_{t+1}]$$ $$x_t=\rho x_{t+1}+y_t$$ $$z_t=(z_0-Z_t)e^{-at}+z_T$$ Determine the steady state. The solution manual ...
33 views

### Problem to find steady state when I assume Y=1

I am trying to do a DSGE model in Matlab, I have all the steady state equations on paper and pencil but I fail to find values for all variables. Indeed, since I have constant return to scale, I have ...
114 views

### Proving the existence of a steady state

I am trying to prove the existence of at least one stable steady state in a situation where I am given properties of the production function but not an explicit functional form. I have the following (...
144 views

### Log linearization

Consider some time series data $X=\{x_t:t\in[0,\infty)\}$. Define a steady state by \begin{align} x\in X:x_{t+1} - x_t = 0 \end{align} and the log deviation from steady state with \begin{align} \hat ...
580 views

my lecturer is doing a rather poor job explaining what he's written down, so I'm wondering if someone would be able to explain the following graph for me? This is a part of the Solow-Swann Growth ...
3k views

### Marginal Product of Capital in the Solow Model

In the classic form of the Solow Model: $$Y=K^\alpha (AL)^{1-\alpha }$$ Describe circumstances in which the marginal product of capital could rise over time, at least for a temporary period. I've ...
59 views

### Question on overlapping generations

My question is from over lapping generations Question is as follows I found that $$k(t+1)= \frac{\beta(1-\alpha)}{(1+\beta)(1+n)}A(t)k(t)^{\alpha}$$ How can I deal with A(t) to find the steady state \$...