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4 votes
Accepted

Why do we omit the integral when deriving the f.o.c.’s in long-run growth models such as Romer (1990)?

The justification for this rule of thumb is the calculus of variations, specifically with the functional derivative. First, note that the problem is static, so for ease of notation I'll drop the ...
Wittgenstein's Poker's user avatar
2 votes
Accepted

Find the salary and interest rate in the $AK$ model

It is difficult to provide definitive answer, if there is possibility that something is missing. it could be a trick question and $w$ could be zero given the assumptions, indeed if that is the ...
1muflon1's user avatar
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1 vote

Find the salary and interest rate in the $AK$ model

For the perfect competition case, it was my trivial solution: set price equal to marginal productivity. $Y_t = A_t K_t$ $r_t = \frac{\partial Y_t}{\partial K_t} = A_t$ $w_t = \frac{\partial Y_t}{\...
Nicolas Torres's user avatar

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