文档介绍：Intermediate Macroeconomics
Lecture 6
Economic Growth
Goal
Develop the Solow Growth Model
--- How much of the economy’s output should be consumed today and how much should be saved for the future?
Static analysis (Ch. 3) Dynamic
The Accumulation of Capital
The supply for goods
Production function:
Characteristics: CRS
Per Capita ---
The Accumulation of Capital
The production function
y
k
y=f(k)
The Accumulation of Capital
The demand for goods
--- Solow model assumes that the demand for
es from consumption and investment
only:
The Accumulation of Capital
The steady-state level of capital
y
k
y=f(k)
i=sf(k)
y
c
i
The Accumulation of Capital
Change in capital stock
y=f(k)
y
k
i=sf(k)
k*
The Accumulation of Capital
Steady-state
The Accumulation of Capital
Example: Cobb-Douglas function
Steady state:
The Accumulation of Capital
s=, =, k=1 k*=9