# Tag Info

Accepted

### Why are real median household incomes stagnant?

The metric of median household income is also used by others to argue the presence of income inequality: https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States#Causes However, it seems ...
• 27.2k

### Why do we need to "get the economy moving again"?

Both Alice and Kate have bills to pay, regardless of whether they are earning money or not. Restaurants and salons have to pay rent and maintenance on their properties whether they are in business or ...
Accepted

### When Optimal Control fails (?)

I believe the problem is that the steady state may not exist, and the system instead exhibits steady growth (depending on parameters). The reason is because the model is equivalent to the standard ...
• 1,056
Accepted

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

This is when the attempt at accuracy creates confusion and misunderstanding. Back in the day, growth models were not incorporating technological progress, and led to a long-run equilibrium ...
• 32.2k
Accepted

• 1,056

### Why is economic growth measured exponentially rather than linearly?

Because we use today's capital stock to produce tomorrow's output, some fraction of which is invested, so you should expect something like $dK/dt=\alpha f(K)$ where $f$ is increasing in $K$.
• 1,513

### Banking System, Canada & US

Limiting the scope to the question of why the US encouraged the proliferation of many banks, one important contributor was the 1927 McFadden act, which placed significant restrictions on interstate ...
• 6,265
The "golden rule" is the level at which steady-state consumption is at a maximum, given the parameters of the model. Steady state consumption is c^* = (1-s^*)\cdot f[k^*(s^*)] = f[k^*(s^*)] - s^*f[...