Q: Consider Problem 1.10. Suppose there is a marginal increase
Consider Problem 1.10. Suppose there is a marginal increase in K. (a) Derive an expression (in terms of K/Y,δ, the marginal product of capital FK, and the elasticity of substitution between capital an...
See AnswerQ: Consider the same setup as at the start of Problem 1.
Consider the same setup as at the start of Problem 1.10: the economy is described by the assumptions of the Solow model, except that factors are paid their marginal products and all labor income is co...
See AnswerQ: Go through steps analogous to those in equations(1.29
Go through steps analogous to those in equations(1.29) (1.32) to find how quickly y converges to y∗ in the vicinity of the balanced growth path.
See AnswerQ: One view of technological progress is that the productivity of capital goods
One view of technological progress is that the productivity of capital goods built at t depends on the state of technology at t and is unaffected by subsequent technological progress. This is known as...
See AnswerQ: Consider a Solow economy on its balanced growth path. Suppose the
Consider a Solow economy on its balanced growth path. Suppose the growth accounting techniques described in Section 1.7 are applied to this economy. (a) What fraction of growth in output per worker do...
See AnswerQ: (a) In the model of convergence and measurement error in
(a) In the model of convergence and measurement error in equations (1.39) and (1.40), suppose the true value of b is −1. Does a regression of ln(Y/N)1979 − ln(Y/N)1870 on a constant and ln(Y/N)1870 yi...
See AnswerQ: Suppose, as in the Diamond model, that Lt two-
Suppose, as in the Diamond model, that Lt two-period-lived individuals are born in period t and that Lt = (1 + n)Lt−1. For simplicity, let utility be logarithmic with no discounting: Ut =ln(C1t)+ln(C2...
See AnswerQ: Suppose that the old individuals in period 0, in addition to
Suppose that the old individuals in period 0, in addition to being endowed with Z units of the good, are each endowed with M units of a storable, divisible commodity, which we will call money. Money i...
See AnswerQ: Consider the static search and matching model analyzed in equations (11
Consider the static search and matching model analyzed in equations (11.71) (11.75). Suppose, however, that the matching function, M(•), is not assumed to be Cobb Douglas or to have constant returns....
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