高级宏观经济学-02-The-Solow-growth-model.docxVIP

PAGE PAGE 1 The Solow growth model Assumptions The production function: Y (t) ? F (K (t), A(t)L(t)) AL is effective labor. Labor-augmenting Harrod-neutral Y (t) ? F ( A(t)K (t), L(t)) Y (t) ? A(t)F (K (t), L(t)) Capital-augmenting Hicks-neutral Constant returns to scale. F (cK (t), cA(t)L(t)) ? cF (K (t), A(t)L(t)) ?c ? 0 No specialization: the economy is big enough. No other important factors, e.g. Land and other natural resources ??? F ? K ,1? ? 1 F (K , AL) ? ? ? AL ? AL ? y ? f (k ) k is the amount of capital per unit of effective labor. f (0) ? 0, f (k ) ? 0, f (k ) ? 0 Inada (1964) conditions: lim f (k ) ? ?, k ?0 lim f (k ) ? 0 k?? To ensure that the path of the economy does not diverge Example: Cobb-Douglas production function to verify its constant return to find the intensive form to check all conditions F (K , AL) ? K ? ( AL)1?? 0 ? ? ? 1 to see that all technical progresses are same The evolution of the inputs into production L(t) ? dL(t) ? nL(t) dt A (t) ? gA(t) K (t) ? sY (t) ? ?K (t) We assume n ? g ? ? ? 0 What can we expect in such a simple model? The dynamics of the model k(t) ? sf ?k?t ??? ?n ? g ? ? ?k?t ? Investment perunit of effective labork Investment per unit of effective labor Actual and break-even investment Inada condition ensures that the two lines must eventually cross f (k ) ? 0 ensures that they intersect only once The phase diagram for k in the Solow model k ? k ? k The balanced growth path: a situation where each variable of the model is growing at a constant rate. “the steady state” (Barro and Sala-i-Martin Economic Growth 1999 ) sf ?k ??? ?n ? g ? ? ?k* y* ? f ?k ??s, n, g,? ?? K ? Y ? n ? g K Y K / L Y / L are growing at rate g . The impact of a change in the saving rate The saving rate is exogenous in the Solow model The impact on output: The long-run effect Investment perunit of effective labork Investment per unit of effective labor The effect of an increase in the saving rate on investment The short-run