What is the effect of an increase in g on the equilibrium

Assignment Help Econometrics

Reference no: EM131135998

Consider the canonical OLG model with log preferences,

for each individual. Suppose that there is population growth at the rate n. Individuals work only when they are young and supply one unit of labor inelastically. Production technology is given by

where A(t + 1) = (1+ g) A(t), with A (0) > 0 and g > 0.

(a) Define a competitive equilibrium and the steady-state equilibrium.

(b) Characterize the steady-state equilibrium, and show that it is globally stable.

(d) What is the effect of an increase in β on the equilibrium? Provide an intuition for this result.

Reference no: EM131135998

Questions Cloud

Criminal conduct and criminal law : According to the text, crime has been part of the human condition since people began to live in groups. Ancient documents indicate that conduct we now call murder, theft, or robbery was identified as criminal by civilizations that existed thousand..

Labor relations-subcontract work without bargaining : Management may subcontract work without bargaining with a union. Management may relocate work previously done by union employees without bargaining with a union. the 1986 COBRA Act provides that terminated employees can choose to have their health ca..

How distribution of fossil fuel deposits influence economic : How does the distribution of fossil fuel deposits influence economic and social development in Central Asia

Restatement of the law third : From the e-Activity, determine the primary manner in which an Attorney General at both the state and federal level would use the "Restatement of the Law Third, Agency". Describe the potential impact of the Attorney General's issued opinions in cr..

What is the effect of an increase in g on the equilibrium : What is the effect of an increase in β on the equilibrium? Provide an intuition for this result.

What is the northern latitude limit of this soil order : Distribution of Oxisols- What is the northern latitude limit of this soil order? What is the southern latitude limit of this soil order? What two latitude zones does this latitudinal range span

Provides permanent storage for data and instructions : Provides permanent storage for data and instructions that do not change, such as programs and data from the computer manufacturer.

Describe the publication and codification of statutory law : According to the Library of Congress, approximately 40,000 state and federal laws are ratified annually. For this reason, it is important to have an understanding of the manner in which a law is enacted. Imagine that your supervising attorney has ..

Examine two forces that would cause company to want to move : Imagine that you work for an organization that decided to move its operations to another country due to decreased costs of employee salary and operational expenses. Examine two (2) forces that would cause a company to want to move their operational..

User Account

All Pages