新古典增长模型完整推导.pdfVIP

Neoclassical Growth Model Weijie Chen Department of Political and Economic Studies University of Helsinki 15 June, 2011 In this article, we use dynamic programming to solve neoclassical growth model which is based on microfoundation. Objectives of agents are formed explicitly, households choose saving in order to maximize utility, firms max- imize their profits by decisions of employment and investment. Sometimes Solow model is also called neoclassical growth model, however Solow model is very di↵erent from the what we are presenting here, the most prominent feature is that savings rate is exogenous in Solow model. 1 The Decentralised Economy What we have seen previously, single individual economy or Robinson Cru- soe model is called centralised economy, representative agent make decisions on consumption, saving, leisure and works, which means it can be replicated by a central planner making decision for all individuals. There is no need for market structure, all decisions automatically coordinate. In order to coordinate decision in decentralised economy, we need to introduce markets, such as labour market, capital market, assets market and etc. Neoclassical growth model is a decentralised economy model, it is the baseline model for DSGE modeling. Households and firms will optimise their preferences based on dynamic budget constraints. A general equilibrium will be reached between representative household, representative firm and government. 1 2 Model Setup Representative Firm We assume a competitive economy with identical firms, then we use representatives to build the model. Production function of representative firms is Cobb-Douglas form with Harrod-neutral, Y = K↵ (A L )1↵ with 0 ↵ 1