Chapter 5 Flashcards
1
Q
Long run capital stock
A
MPK /(1+μ) -δ = r^_
2
Q
Steady State Production
A
Y=f(k) EN
Y/EN = f (k*)
3
Q
Change in Capital (K)
A
ΔK/K = ΔY/Y = g+n
4
Q
Change in production (Y)
A
ΔK/K = ΔY/Y = g+n
5
Q
Steady state
A
Long run levels of capital and output are proportional to employment.
Production = δ
Birth = Death rates
6
Q
r = in steady state
A
ρ + g
Subjective discount rate + growth in production per worker
7
Q
K/Y Ratio Cobb Douglas
A
(α/(1+μ)(r+δ))^(1/1-α)
α is the marginal propensity to capital
8
Q
Maximised steady state consumption
A
f’(k) = n + g + δ
9
Q
Steady state capital stock
A
MPK/(1+μ) -δ= r^_
