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• 2,419
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Endogenous Growth: Balanced Growth Path with CRRA Utility

You have obtained $$\frac{c_{t+1}}{c_t}=[\beta(\alpha+1-\delta)]^{\frac{1}{\gamma}} \equiv 1+g$$ and $$\frac{k_{t+1}}{k_t}=1+(1-\delta)-\frac{c_t}{k_t}$$ By equating you can show that there is a ...
• 33.9k
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Growth rate of variables on a balanced growth path (BGP)

The concept of "balanced growth path" in economics incorporates three characteristics at the same time (related to the main macroeconomic aggregates): 1) Growth rates are constant (reflecting a ...
• 33.9k

• 8,405

Introduction of an asset tax in the AK model

I think your math is mostly correct but I have to admit that I am not used to AK models. A short answer for your main question: is it ok to introduce taxation in the model without including the ...
• 1,916
Accepted

Models with Learning by Doing and Knowledge Spillovers - Barro, Sala-i-Martin (2003)

We can show this by adding some public good to the model that will be financed by lump-sum taxes (which is also discussed in Barro & Sala-i-Martin (2004). Economic Growth 2nd ed. ch 4.4.1). So ...
• 56.7k
Accepted

Induced technical change vs. directed technical change

Directed technical change is the relatively recent name for what it was was previously called Induced technical change. Informal discussion about the endogenous direction of technical change was ...
• 8,591
Accepted

Isoelastic demands and constant markup

Let's go for steps: Profit function : $\Pi(Q) = P(Q)Q -C(Q)$ Where $\Pi(Q)$ are profits and $P(Q)$ is the inverse demand function, i.e., the price at which $Q$ can be sold given the existing demand, ...
• 403
Accepted

• 12.2k

Defining endogenous vs exogenous, in layman's terms?

The terms 'exogenous' and 'endogenous' have to be understood relative to the scope of a model or a theory. Endogenous variables are those explained within the theory, while exogenous variables are not ...
• 1,327
Accepted

Social Planner vs Representative Household

If we assume that there is a single household (there are some subtleties in how one defines a representative household), then the Pareto optimality is the same as solving the planner's problem. The ...
• 13.2k
1 vote

Technology as an endogenous economic variable

The whole endogenous technological change literature, a.k.a endogenous growth models, is about how various market factors affect entrepreneurs or the R&D sector conducting technological ...
• 2,419

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