Also, Young's Theorem ensures that FNK FKN. Armed with these useful properties equations (4.29) and (4.30) can

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Also, Young's Theorem ensures that FNK FKN. Armed with these useful properties equations (4.29) and (4.30) can be derived. First, totally differentiate FN (N, K):

dFN FNN dN + FNK dK.

But (P3) ensures that FNN —(K/N)FNK, so that

(a) can be written as:

dFN = —(K/N)FNK dN FNK dK —FNKK dN dK]

N K

(a)

ot 7eneral case where the ations (4.13)—(4.15) are iliar from Chapter 1:

(4.28)

1 — coL (c)

aKN dFN FNKK dK dN FN FN K N

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Foundations Of Modern Macroeconomics

ISBN: 9781264857937

1st Edition

Authors: Ben J. Heijdra, Frederick Van Der Ploeg

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