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Subject:
Proving properties of the Solow growth model on a balanced growth path
Category: Reference, Education and News > Teaching and Research Asked by: emose-ga List Price: $25.00 |
Posted:
11 Oct 2006 06:37 PDT
Expires: 13 Oct 2006 02:21 PDT Question ID: 772618 |
This is an advanced macroeconomics question regarding the Solow growth model as presented in Romers: Advanced Macroeconomics Chapter 1,which I have been having difficulty with: Q: (i)The return to capital (r) is roughly constant over time as are the shares of output going to capital and to labour. Does a Solow economy on a balanced growth path exhibit these properties? What are the growth rates of r and w on a balanced growth path? (ii) Suppose the economy begins with a level of k less than k*. As k moves towards k*, is w growing at a rate greater than, less than or equal to it's growth rate on the balanced growth path? what about r? I need a fairly detailed and most likely mathematical based answer explained and justified including assumptions - not just simple yes/no etc. cheers |
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