Q: Consider the model of Section 5.5. Suppose, however
Consider the model of Section 5.5. Suppose, however, that the instantaneous utility function, ut, is given by ut = lnct+b(1−t )1−γ/(1−γ),b >0,γ>0, rather than by (5.7) (see Problem 5.4). (a) Find the...
See AnswerQ: Suppose that each worker must either work a fixed number of hours
Suppose that each worker must either work a fixed number of hours or be unemployed. Let CE i denote the consumption of employed workers in state i and CU i the consumption of unemployed workers. The f...
See AnswerQ: Suppose technology follows some process other than (5.8)
Suppose technology follows some process other than (5.8) (5.9). Do st = ˆ s and t = ˆ for all t continue to solve the model of Section 5.5?
See AnswerQ: Consider the model of Section 5.5. Assume for simplicity
Consider the model of Section 5.5. Assume for simplicity that n=g=A=N=0. Let V(Kt,At), the value function, be the expected present value from the current period forward of lifetime utility of the repr...
See AnswerQ: Consider the model of Section 5.3 without any shocks.
Consider the model of Section 5.3 without any shocks. Let y∗, k∗, c∗, and G∗ denote the values of Y/(AL), K/(AL), C/(AL), and G/(AL) on the balanced growth path; w∗ the value of w/A; ∗ the value of L/...
See AnswerQ: Suppose that Y(t) =K(t)α
Suppose that Y(t) =K(t)α[(1−aH)H(t)]β, H(t)=BaHH(t), and K(t)=sY(t). Assume 0
See AnswerQ: Consider the following model with physical and human capital:
Consider the following model with physical and human capital: where aK and aH are the fractions of the stocks of physical and human capital used in the education sector. This model assumes that huma...
See AnswerQ: Consider the model of Section 4.1 with the assumption that
Consider the model of Section 4.1 with the assumption that G(E)=eφE. Suppose, however, that E, rather than being constant, is increasing steadily: E(t) = m, where m > 0. Assume that, despite the stead...
See AnswerQ: Consider the model in Problem 4.5. (a
Consider the model in Problem 4.5. (a) What are the balanced-growth-path values of k and h in terms of sk, sh, and the other parameters of the model? (b) Suppose α = 1 3 and β = 1 2. Consider two coun...
See AnswerQ: Suppose output is given by Y(t)=K(t
Suppose output is given by Y(t)=K(t)αH(t)β[A(t)L(t)]1−α−β, α>0, β>0, α + β
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