Q: In the model of delegation analyzed in Section 12.8,
In the model of delegation analyzed in Section 12.8, suppose that the policymaker’s preferences are believed to be described by (12.69), with a> a, when πe is determined. Is social welfare higher if t...
See AnswerQ: (a) Show that (3.48) follows from
(a) Show that (3.48) follows from (3.47). (b) Derive (3.49).
See AnswerQ: Consider the model of Section 3.5 with two changes.
Consider the model of Section 3.5 with two changes. First, existing knowledge contributes less than proportionally to the production of new knowledge, as in Case 1 of the model of Section 3.2: A(t) =...
See AnswerQ: Consider a variant of the model in equations (3.22
Consider a variant of the model in equations (3.22) (3.25). Suppose firm i’s output is Yi(t) = Ki(t)α[A(t)Li(t)]1−α, and that A(t) =BK(t). Here Ki and Li are the amounts of capital and labor used by f...
See AnswerQ: Assume that there are two sectors, one producing consumption goods and
Assume that there are two sectors, one producing consumption goods and one producing capital goods, and two factors of production: capital and land. Capital is used in both sectors, but land is used o...
See AnswerQ: Which of the following possible regression results concerning the elasticity of long
Which of the following possible regression results concerning the elasticity of long-run output with respect to the saving rate would provide the best evidence that differences in saving rates are not...
See AnswerQ: Consider two economies (indexed by i =1,2)
Consider two economies (indexed by i =1,2) described by Yi(t)=Ki(t)θ and Ki(t)=siYi(t), where θ>1. Suppose that the two economies have the same initial value of K, but that s1 > s2. Show that Y1/Y2 is...
See AnswerQ: Consider the economy analyzed in Section 3.3. Assume that
Consider the economy analyzed in Section 3.3. Assume that θ + β 0, and that the economy is on its balanced growth path. Describe how each of the following changes affects the gA=0 and gK =0 lines and...
See AnswerQ: Consider the economy described in Section 3.3, and assume
Consider the economy described in Section 3.3, and assume β + θ 0. Suppose the economy is initially on its balanced growth path, and that there is a permanent increase in s. (a) How, if at all, does t...
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