4. In a Solow-type economy, total national saving, St, is St = sYt - hKt. The extra...

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4. In a Solow-type economy, total national saving, St, is St = sYt - hKt.

The extra term, -hKt, 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 Global Edition

ISBN: 978-1292318615

10th Edition

Authors: Andrew Abel ,Ben Bernanke ,Dean Croushore

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Question Posted: Nov 14, 2024 06:00 AM

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4. In a Solow-type economy, total national saving, St, is St = sYt - hKt. The extra...

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