Question: Explain why in the neoclassical growth model with exogenous technological change, the long-run equilibrium rate of growth in output is independent of the saving rate

Explain why in the neoclassical growth model with exogenous technological change, the long-run equilibrium rate of growth in output is independent of the saving rate (S/Y)?

Step by Step Solution

★★★★★

3.42 Rating (158 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

An increase in the saving rate will increase the rate of capital formatio... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

919-B-E-M-E (8365).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

In the neoclassical growth model we express the investment function as i= sf(k), where i is investment per worker, s is the saving ratio, k is capital per worker, and y is output per worker. A) Plot...

What two explanations of productivity growth does endogenous growth theory offer? How does the production function in an endogenous growth model differ from the production function in the...

An economy is in a steady state with no productivity change. Because of an increase in acid rain, the rate of capital depreciation rises permanently. a. According to the neoclassical growth model,...

In the neoclassical growth model with exogenous technological change, the long-run equilibrium rate of growth in output is independent of the saving rate (S/Y). Does this mean saving is unimportant...

Please help me answer the question, thank you. Home is a small open economy that can be described by the long-run classical model: Consumption: C = 11250 + 0.75(Y - T) - 2000r Investment: I =16500 -...

2 (20 points) - Chapters 4 & 5 Home is a small open economy that can be described by the long-run classical model: Consumption: C = 11250 + 0.75(Y - T) - 2000r Investment: I = 16500 - 1500r...

Question 2 (20 points) - Chapters 4 & 5 Home is a small open economy that can be described by the long-run classical model: Consumption: C = 11250 + 0.75(Y - T) - 2000r Investment:I = 16500 - 1500r...

Home is a small open economy that can be described by the long-run classical model: Consumption:C = 11250 + 0.75(Y - T) - 2000r Investment:I = 16500 - 1500r Government spending:G = 12000 Net...

Home is a small open economy that can be described by the long-run classical model: Consumption: C = 11250 + 0.75(Y - T) - 2000r Investment:I = 16500 - 1500r Government spending:G = 12000 Net...

Question 2 (20 points) - Chapters 4 81 5 Home is a small open economy that can be described by the longrun classical model: Consumption: C = 11250 + 0.75(Y - T) - 2000r Investment: I = 16500 - 1500r...

As an Advocate General, please present your argument and reason opinion on the matter. Must include why there's a violation and whether the fine imposes is suitable with precedent cases and articles....

Calculate the current ratio, quick ratio, and cash ratio for Tyler Toys for 2010 and 2011. Should any of these ratios or the change in a ratio warrant concern for the managers of Tyler Toys or...

In year 1, Gardner used funds earmarked for use in Gardners business to make a personal loan to Carson. In year 3, Carson declared bankruptcy, having paid off only $500 of the loan at that time. In...

In the discussion of unbalanced growth in section 10.4.1, we considered the case in which labor grew faster than capital. Now analyze a case in which capital grows faster than labor using a diagram...

In 1802, a new market developed in the United States garden seeds sold in small packets. The new market was developed by the Shakers, a religious group whose members took a vow of celibacy and lived...

1. Consider an accounting firm with two accountants. a. Fill in the blanks in the following table. b. Quigley has a comparative advantage in_____________, while Slokum has a comparative advantage...

1. Arrows up or down: Outsourcing _____ production costs and _____ consumer prices. 2. In the first three months of 2004, the number of jobs moving to another state was _____ (larger/smaller) than...

Please show work Question 10 Airlines often sell more tickets for a flight than there are seats, because some ticket holders don't show up for the flight. An airline estimates that 93% of ticket...

ques 6 General Requirements For each of the functions described in questions 1 to 6 you are to: 1. Modify the function to count the number of operations performed when the function executes. Some...

You have been given the following return information for a mutual fund, the market index, and the risk - free rate. You also know that the return correlation between the fund and the market is 0 . 9...