Calculate the steady-state equilibrium of this economy

Assignment Help Econometrics

Reference no: EM131139997

Consider the basic Solow model with no population growth and no technological progress and a production function of the form F (K, H ), where H denotes the efficiency units of labor (human capital) given by

where N is the set of all individuals in the population, and hi is the human capital of individual i. Assume that H is fixed. Suppose there are no human capital externalities and factor markets are competitive.

(a) Calculate the steady-state equilibrium of this economy.

(b) Prove that if 10% higher h at the individual level is associated with a% higher earnings, then a 10% increase in the country's stock of human capital H will lead to a% increase in steadystate output. Compare this result to the immediate impact of an unanticipated 10% increase in H (i.e., consider the impact of a 10% increase in H with the stock of capital unchanged).

Reference no: EM131139997

Questions Cloud

What is the job of the legislative branch : What is the job of the legislative branch? What two groups make up Congress

Is the customer always right : Is the customer Always Right? Brianna Sells an intangible product - homeowners’ insurance. She works hard and tries to meet the expectations of her customers. Eva and Murray Shaddock have had insurance policy for three years. Mr. Shaddock calls Brian..

Tax research problem : research the tax issue so the Company can decide whether to settle the audit dispute or take the issue to court and tax litigation.

Calculate the steady-state equilibrium of this economy : where N is the set of all individuals in the population, and hi is the human capital of individual i. Assume that H is fixed. Suppose there are no human capital externalities and factor markets are competitive.

Compare the use of a dfd model with a uml activity : Explain the difference between a waterfall and an iterative/incremental System Development Life Cycle. Illustrate your answer with diagrams.

Use strategic management approach to decision making : Why do you think some chief executive officers fail to use a strategic management approach to decision making?

What aspect of strategy formulation : What aspect of strategy formulation do you think requires the most time? Why? Remember to cite your sources with in-text citations and include the source in your references.

What type of business organization should i form : What type of business organization should I form? Describe your company. Write a description of your business idea. What is the purpose of my company?

User Account

All Pages