9.10. Suppose that (K) = a bK and C (I ) = I 2/2. (a)

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9.10. Suppose that π (K) = a − bK and C (I ) = αI 2/2.

(a) What is the q˙= 0 locus? What is the long-run equilibrium value of K?

(b) What is the slope of the saddle path? (Hint: Use the approach in Section 2.6.)

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Advanced Macroeconomics

ISBN: 9780073511375

4th Edition

Authors: David Romer

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Question Posted: Nov 14, 2024 06:00 AM

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9.10. Suppose that (K) = a bK and C (I ) = I 2/2. (a) What is the q= 0 locus? What is the long-run equilibrium value of K? (b) What is the slope of the saddle path? (Hint: Use the approach in...
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9.10. Suppose that (K) = a bK and C (I ) = I 2/2. (a)

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Advanced Macroeconomics

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