Suppose the TFP parameter, , increases permanently. (a) What happens to the desired capital stock? (b) What

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Suppose the TFP parameter, Ā, increases permanently.
(a) What happens to the desired capital stock?
(b) What happens to investment?
(c) Hard: What happens to the investment rate in the long run? Why?

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Macroeconomics

ISBN: 978-0393923902

3rd edition

Authors: Charles I. Jones

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Question Posted: Feb 25, 2016 06:37 AM

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Suppose the TFP parameter, , increases permanently. (a) What happens to the desired capital stock? (b) What

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a The increase in the TFP parameter increases the MPK The increase in M...View the full answer

Macroeconomics

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