New answers tagged endogenous-growth
2
votes
The Solow growth model
The answer: it is an assumption
Solow-models usually assume that $f$ fulfills the Inada conditions, points 3. and 4. of which state
$$
\begin{equation*}
\lim_{k \to 0} f'(k) = \infty \\
\lim_{k \to \...
- 28.4k
2
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The Solow growth model
Because $\delta k$ is linear function, so the slope of the function is always constant, whereas $sf(k)$ is typically nonlinear function exponential function like $f(k)=k^\alpha$ with $0<\alpha<1$...
- 52.8k
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CRS assumption in solow model
One way to conceptualize constant returns to scale is by envisioning multiple plants employing the same technology, where it is feasible to initiate as many plants as desired to produce the desired ...
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3
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CRS assumption in solow model
From an economic point of view, the assumption of Constant Returns to Scale can have several reasons, and they are not specific of the Solow model.
I can quote what Solow himself says about Constant ...
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