Find cobb-douglas aggregate producntion function

Assignment Help Econometrics

Reference no: EM13183980

Assume a continuous-time solow growth model with no technical progress. The economy is closed and there is no government sector. Labor supply is given by L_t = e^nt, n>0. The average propensity to save out of GDP is s,, with 0<s<1. GDP is given by a Cobb-douglas aggregate producntion function Qt=AK^aL^(1-a), where A is constant. Solve for steady state of kt where kt=K/L

Suppose the Solow model from this question applies to two seperate economies i=1 and i =2. The economies are the same except for A1>A2 and s1<s2. Let c(i)* and y(i)* be the steady state consumption per labor and output per labor for economy i=1,2. Show how C(1)* comparse to c(2)* and how y(1*) compares to y(2)*. (Assume at equilbrium for both k of each economy such that k1=k2). Then solve for k1>k2 and k2>k1.

Please note that I already know how to solve for steady state (I don't need help solving for steady state) and can solve for when k1*=k2* and when k1*>k2*, but having trouble with when k2*>k1*.

Reference no: EM13183980

Questions Cloud

Explain how is concentration an intensive property : How is concentration an intensive property? I mean if you add more amount of a substance(mass), the number of moles increase and so the concentration increases.

What type of shift in the demand for fruit : Before 2005, economists estimated the cross-price elasticity between fruits and vegetables to be +1.5. Since the introduction in 2005 of the "New Food Pyramid", the revised estimate of the cross-price elasticity between fruits and vegetables is no..

State diploid cell contains three pairs of chromosomes : Consider a diploid cell that contains three pairs of chromosomes designated AA, BB, and CC. Each pair includes a maternal and a paternal member (e.g., A^m and A^p.).

State the henderson-hasselbalch equation to calculate the ph : Use the Henderson-Hasselbalch equation to calculate the pH of a 250 mL solution of 0.3 M acetic acid (pKa = 4.76; assume it is initially fully protonated)

Find cobb-douglas aggregate producntion function : Assume a continuous-time solow growth model with no technical progress. The economy is closed and there is no government sector. Labor supply is given by L_t = e^nt, n>0. The average propensity to save out of GDP is s,, with 0

State miscible liquids : container and found that no change had occurred after one week. Offer possible explanations for the lack of reaction. Assume that A, B, and C are totally miscible liquids.

How the exchange rate equal to the equilibrium exchange rate : Assume that the LM curve for a small open economy with a fixed exchange rate is given by Y = 200r - 200 + 2(M/P). This IS curve is given by Y = 400 + 3G - 2T + 3NX - 200r. The function for the net exports is NX = 200 - 100e, where e is the..

The effect of drinking red wine on heart disease : Suppose you decide to perform an experimental study that you will call "The effect of drinking red wine on heart disease," where the treatment is drinking a glass of red wine daily. (Assume "heart health" can be measured by medical testing procedures..

Define negative relationshp between gross domestic product : Compute the discount factor 1/(1+r)^t for r=1, 5, or 10 perent interest rates and t=30 and 50 years. remember that 1 percent is .01. based on your computation, is teh choice of discount factor important for deciding whether to do somehtinga bout..

User Account

All Pages