Exercise 15.14. Characterize the Pareto optimal allocation in the model with knowledge spillovers and state dependence (Section
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Exercise 15.14. Characterize the Pareto optimal allocation in the model with knowledge spillovers and state dependence (Section 15.4). Show that the relative technology ratio in the stationary Pareto optimal allocation no longer coincides with the BGP equilibrium. Explain why this result differs from that in Section 15.3.
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