4 In a Solow-type economy, total national saving, S is 5, sY, - hK,. The extra...

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4 In a Solow-type economy, total national saving, S" is 5, � sY, - hK,. The extra term, -hK" reflects the idea that when wealth (as measured by the capital stock) is higher, saving is lower. (Wealthier people have less need to save for the future.) Find the steady-state values of per-worker capital, output, and consumption. What is the effect on the steady state of an increase in h?

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Macroeconomics

ISBN: 126148

6th Edition

Authors: Andrew B. Abel, Ben S. Bernanke, Dean Croushore

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