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By Brian Snowdon

ISBN-10: 1840643870

ISBN-13: 9781840643879

The Encyclopedia of Macroeconomics is an authoritative and helpful reference resource on macroeconomics which embraces definitions of phrases and ideas, conflicting ideological ways and the contributions of significant thinkers. accomplished in scope, it comprises over three hundred brief entries and greater than a hundred specifically commissioned major entries from an across the world well known workforce of students.

The alphabetically ordered entries could be necessary either as a simple reference resource and a provocative stimulus for extra studying. The Encyclopedia will quickly be proven as a number one reference resource on macroeconomics that would either enlighten scholars and be hugely valued through students and academics of economics.

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8) simplifies to a kt ¼ BktÀ1 ; ð2:8′Þ b ð1ÀaÞA where B  1þb n . 8) vanishes. As mentioned previously, this special case is similar to the Solow model because the saving rate of young households is a constant, with no dependence on the return to capital. 8′) can be easily sketched by plotting kt against ktÀ1 as in Fig. 2. Imagine that the economy begins at ktÀ1 ¼ k1 . To find out what the capital–labor will be in period 2, move vertically up to the transition equation to find k2 . In period 2, k2 will now be the initial capital–labor ratio, move horizontally from the transition equation to the 45-degree line and then back down vertically to the horizontal axis.

3. 38 2 Neoclassical Growth Theory Fig. 3 Simulated US interest rates and growth rates: 1870–2000. Notes The solid line gives the annualized rate of return to capital and the dashed line gives the annualized growth rate of labor productivity. The annualized growth rates over 30-year periods were plotted above the midpoint of the intervals between the periods The model predicts high interest rates (14 %) and growth rates (3 %) for the late nineteenth century and then a decline in both variables over the twentieth century.

How is the sketch affected by an increase in w? An increase in n? Explain 44 2 Neoclassical Growth Theory 7. Explain why an increase in this period’s capital stock causes an increase in next period’s capital stock. Why does the linkage become weaker as the economy accumulates more capital? 8. As the economy moves toward the steady state from below what happens to its growth? What happens to the growth rate if it heads to the steady state from above? 9. Suppose that economy A and economy B have identical structures (production technologies, preferences, and population growth rates), but economy A has a higher capital–labor ratio.

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An Encyclopedia of Macroeconomics by Brian Snowdon

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