fix(modelsofproduction): render graphs
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parent
7989ba0033
commit
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5 changed files with 88 additions and 47 deletions
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@ -629,18 +629,16 @@ function drawRomerSolowChangeGraph() {
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.text("log10(Y)");
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}
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document.addEventListener("DOMContentLoaded", function () {
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drawSolowGraph();
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drawRomerGraph();
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drawRomerlGraph();
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drawRomerSolowGraph();
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drawRomerSolowChangeGraph();
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window.onresize = () => {
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drawSolowGraph();
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drawRomerGraph();
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drawRomerlGraph();
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drawRomerSolowGraph();
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drawRomerSolowChangeGraph();
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window.onresize = () => {
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drawSolowGraph();
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drawRomerGraph();
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drawRomerlGraph();
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drawRomerSolowGraph();
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drawRomerSolowChangeGraph();
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};
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});
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};
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@ -27,7 +27,7 @@
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appearance: none;
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width: 100%;
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height: 2px;
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background: black;
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background: var(--text);
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cursor: pointer;
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outline: none;
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transform: translateY(-50%);
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@ -36,26 +36,29 @@
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.slider input::-webkit-slider-thumb {
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-webkit-appearance: none;
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width: 2px;
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height: 15px;
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background: black;
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cursor: col-resize;
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width: 12px;
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height: 12px;
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border-radius: 50%;
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background: var(--text);
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cursor: pointer;
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position: relative;
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}
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.slider input::-moz-range-thumb {
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width: 2px;
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height: 15px;
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background: black;
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cursor: col-resize;
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width: 12px;
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height: 12px;
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border-radius: 50%;
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background: var(--text);
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cursor: pointer;
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position: relative;
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border: none;
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}
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.slider input::-webkit-slider-runnable-track,
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.slider input::-moz-range-track {
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width: 100%;
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height: 2px;
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background: black;
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background: var(--text);
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border: none;
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}
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@ -64,6 +67,10 @@
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justify-content: center;
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}
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.sliders li {
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list-style: none;
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}
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.romer-table-container {
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display: flex;
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justify-content: center;
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@ -79,7 +86,7 @@
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#romer-table th,
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#romer-table td {
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border: 1px solid black;
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border: 1px solid var(--border);
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text-align: center;
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padding: 5px;
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}
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@ -14,7 +14,9 @@ This post offers a basic introduction to the Solow, Romer, and Romer-Solow econo
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The Solow Model is an economic model of production that incorporates the idea of capital accumulation. Based on the [Cobb-Douglas production function](https://en.wikipedia.org/wiki/Cobb%E2%80%93Douglas_production_function), the Solow Model describes production as follows:
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$$Y_t=F(K_t,L_t)=\bar{A}K_t^\alpha L_t^{1-\alpha}$$
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$$
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Y_t=F(K_t,L_t)=\bar{A}K_t^\alpha L_t^{1-\alpha}
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$$
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With:
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@ -41,7 +43,9 @@ Visualizing the model, namely output as a function of capital, provides helpful
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Letting $(L_t,\alpha)=(\bar{L}, \frac{1}{3})$, it follows that:
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$$Y_t=F(K_t,L_t)=\bar{A}K_t^{\frac{1}{3}} \bar{L}^{\frac{2}{3}}$$
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$$
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Y_t=F(K_t,L_t)=\bar{A}K_t^{\frac{1}{3}} \bar{L}^{\frac{2}{3}}
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$$
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Utilizing this simplification and its graphical representation below, output is clearly characterized by the cube root of capital:
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@ -119,17 +123,20 @@ When investment is completely disincentivized by depreciation (in other words, $
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Using this equilibrium condition, it follows that:
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$$Y_t^*=\bar{A}{K_t^*}^\alpha\bar{L}^{1-\alpha}$$
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$$\rightarrow \bar{d}K_t^*=\bar{s}\bar{A}{K_t^*}^\alpha\bar{L}^{1-\alpha}$$
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$$\rightarrow K^*=\bar{L}(\frac{\bar{s}\bar{A}}{\bar{d}})^\frac{1}{1-\alpha}$$
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$$\rightarrow Y^*=\bar{A}^\frac{1}{1-\alpha}(\frac{\bar{s}}{\bar{d}})^\frac{\alpha}{1-\alpha}\bar{L}$$
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$$
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\begin{align*}
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Y_t^* &= \bar{A}{K_t^*}^\alpha\bar{L}^{1-\alpha} \\
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\bar{d}K_t^* &= \bar{s}\bar{A}{K_t^*}^\alpha\bar{L}^{1-\alpha} \\
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K^* &= \bar{L}(\frac{\bar{s}\bar{A}}{\bar{d}})^\frac{1}{1-\alpha} \\
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Y^* &= \bar{A}^\frac{1}{1-\alpha}(\frac{\bar{s}}{\bar{d}})^\frac{\alpha}{1-\alpha}\bar{L}
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\end{align*}
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$$
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Thus, the equilibrium intensive form (output per worker) of both capital and output are summarized as follows:
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$$(k^*,y^*)=(\frac{K^*}{\bar{L}},\frac{Y^*}{\bar{L}}) =((\frac{\bar{s}\bar{A}}{\bar{d}})^\frac{1}{1-\alpha}, \bar{A}^\frac{1}{1-\alpha}(\frac{\bar{s}}{\bar{d}})^\frac{\alpha}{1-\alpha})$$
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$$
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(k^*,y^*)=(\frac{K^*}{\bar{L}},\frac{Y^*}{\bar{L}}) =((\frac{\bar{s}\bar{A}}{\bar{d}})^\frac{1}{1-\alpha}, \bar{A}^\frac{1}{1-\alpha}(\frac{\bar{s}}{\bar{d}})^\frac{\alpha}{1-\alpha})
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$$
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### analysis
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@ -146,7 +153,9 @@ Using both mathematical intuition and manipulating the visualization above, we f
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Lastly (and perhaps most importantly), exogenous parameters $\bar{s}, \bar{d}$, and $\bar{A}$ all have immense ramifications on economic status. For example, comparing the difference in country $C_1$'s output versus $C_2$'s using the Solow Model, we find that a difference in economic performance can only be explained by these factors:
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$$\frac{Y_1}{Y_2}=\frac{\bar{A_1}}{\bar{A_2}}(\frac{\bar{s_1}}{\bar{s_2}})^\frac{\alpha}{1-\alpha}$$
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$$
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\frac{Y_1}{Y_2}=\frac{\bar{A_1}}{\bar{A_2}}(\frac{\bar{s_1}}{\bar{s_2}})^\frac{\alpha}{1-\alpha}
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$$
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We see that TFP is more important in explaining the differences in per-capital output ($\frac{1}{1-\alpha}>\frac{\alpha}{1-\alpha},\alpha\in[0,1)$). Notably, the Solow Model does not give any insights into how to alter the most important predictor of output, TFP.
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@ -167,7 +176,9 @@ The Model divides the world into two parts:
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The Romer Models' production function can be modelled as:
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$$Y_t=F(A_t,L_{yt})=A_tL_{yt}$$
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$$
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Y_t=F(A_t,L_{yt})=A_tL_{yt}
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$$
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With:
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@ -178,7 +189,9 @@ Assuming $L_t=\bar{L}$ people work in the economy, a proportion $\bar{l}$ of the
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Further, this economy garners ideas with time at rate $\bar{z}$: the "speed of ideas". Now, we can describe the quantity of ideas tomorrow as function of those of today: <u>the Law of Ideal Motion</u> (I made that up).
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$$A_{t+1}=A_t+\bar{z}A_tL_{at}\leftrightarrow\Delta A_{t+1}=\bar{z}A_tL_{at}$$
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$$
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A_{t+1}=A_t+\bar{z}A_tL_{at}\leftrightarrow\Delta A_{t+1}=\bar{z}A_tL_{at}
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$$
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Analagously to capital in the solow model, ideas begin in the economy with some $\bar{A}_0\gt0$ and grow at an _exponential_ rate. At its core, this is because ideas are non-rivalrous; more ideas bring about more ideas.
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@ -279,19 +292,27 @@ Playing with the sliders, this graph may seem underwhelming in comparison to the
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To find the output in terms of exogenous parameters, first note that
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$$L_t=\bar{L}\rightarrow L_{yt}=(1-\bar{l})\bar{L}$$
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$$
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L_t=\bar{L}\rightarrow L_{yt}=(1-\bar{l})\bar{L}
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$$
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Now, all that remains is to find ideas $A_t$. It is assumed that ideas grow at some rate $g_A$:
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$$A_t=A_0(1+g_A)^t$$
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$$
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A_t=A_0(1+g_A)^t
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$$
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Using the growth rate formula, we find:
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$$g_A=\frac{\Delta A_{t+1}-A_t}{A_t}=\frac{A_t+\bar{z}A_tL_{at}-A_t}{A_t}=\bar{z}L_{at}=\bar{z}\bar{l}\bar{L}$$
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$$
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g_A=\frac{\Delta A_{t+1}-A_t}{A_t}=\frac{A_t+\bar{z}A_tL_{at}-A_t}{A_t}=\bar{z}L_{at}=\bar{z}\bar{l}\bar{L}
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$$
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Thus, ideas $A_t=A_0(1+\bar{z}\bar{l}\bar{L})^t$. Finally, output can be solved the production function:
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$$Y_t=A_t L_{yt}=A_0(1+\bar{z}\bar{l}\bar{L})^t(1-\bar{l})\bar{L}$$
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$$
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Y_t=A_t L_{yt}=A_0(1+\bar{z}\bar{l}\bar{L})^t(1-\bar{l})\bar{L}
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$$
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### analysis
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@ -384,7 +405,9 @@ From previous analysis it was found that $g_A=\bar{z}\bar{l}\bar{L}$.
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Based on the Law of Capital Motion,
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$$g_K=\frac{\Delta K_{t+1}}{K_t}=\bar{s}\frac{Y_t}{K_t}-\bar{d}$$
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$$
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g_K=\frac{\Delta K_{t+1}}{K_t}=\bar{s}\frac{Y_t}{K_t}-\bar{d}
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$$
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Because growth rates are constant on the Balanced Growth Path, $g_K$ must be constant as well. Thus, so is $\bar{s}\frac{Y_t}{K_t}-\bar{d}$; it must be that $g_K^*=g_Y^*$.
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@ -392,24 +415,35 @@ The model assumes population is constant, so $g_{\bar{L}}=0\rightarrow g_{\bar{L
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Combining these terms, we find:
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$$g_Y^*=\bar{z}\bar{l}\bar{L}+\alpha g_Y^*+(1-\alpha)\cdot 0\rightarrow$$
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$$g_Y^*=\frac{\bar{z}\bar{l}\bar{L}}{1-\alpha}$$
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$$
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\begin{align*}
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g_Y^* &= \bar{z}\bar{l}\bar{L}+\alpha g_Y^*+(1-\alpha)\cdot 0 \\
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g_Y^* &= \frac{\bar{z}\bar{l}\bar{L}}{1-\alpha}
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\end{align*}
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$$
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Solving for $Y_t^*$ is trivial after discovering $g_K=g_Y$ must hold on a balanced growth path.
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Invoking the <u>Law of Capital Motion</u> with magic chants,
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$$g_K^*=\bar{s}\frac{Y_t^*}{K_t^*}-\bar{d}=g_Y^*\rightarrow K_t^*=\frac{\bar{s}Y_t^*}{g_Y^*+\bar{d}}$$
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$$
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g_K^*=\bar{s}\frac{Y_t^*}{K_t^*}-\bar{d}=g_Y^*\rightarrow K_t^*=\frac{\bar{s}Y_t^*}{g_Y^*+\bar{d}}
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$$
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Isolating $Y_t^*$,
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$$Y_t^*=A_t^* (\frac{\bar{s}Y_t^*}{g_Y^*+\bar{d}})^\alpha ({(1-\bar{l})\bar{L}})^{1-\alpha}$$
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$$\rightarrow {Y_t^*}^{1-\alpha}=A_t^*(\frac{\bar{s}}{g_Y^*+\bar{d}})^\alpha({(1-\bar{l})\bar{L}})^{1-\alpha}$$
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$$
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\begin{align*}
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Y_t^* &= A_t^* (\frac{\bar{s}Y_t^*}{g_Y^*+\bar{d}})^\alpha ({(1-\bar{l})\bar{L}})^{1-\alpha} \\
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{Y_t^*}^{1-\alpha} &= A_t^*(\frac{\bar{s}}{g_Y^*+\bar{d}})^\alpha({(1-\bar{l})\bar{L}})^{1-\alpha}
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\end{align*}
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$$
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Plugging in the known expressions for $A_t^*$ and $g_Y^*$, a final expression for the Balanced Growth Path output as a function of the endogenous parameters and time is obtained:
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$$Y_t^*={(A_0(1+\bar{z}\bar{l}\bar{L})^t})^\frac{1}{1-\alpha}(\frac{\bar{s}}{\frac{\bar{z}\bar{l}\bar{L}}{1-\alpha}+\bar{d}})^\frac{\alpha}{1-\alpha}(1-\bar{l})\bar{L}$$
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$$
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Y_t^*={(A_0(1+\bar{z}\bar{l}\bar{L})^t})^\frac{1}{1-\alpha}(\frac{\bar{s}}{\frac{\bar{z}\bar{l}\bar{L}}{1-\alpha}+\bar{d}})^\frac{\alpha}{1-\alpha}(1-\bar{l})\bar{L}
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$$
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### analysis
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@ -6,6 +6,7 @@ const base = z.object({
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date: z.string().optional(),
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useKatex: z.boolean().optional(),
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useD3: z.boolean().optional(),
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scripts: z.array(z.string()).optional(),
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redirect: z.string().optional(),
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});
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@ -20,7 +20,7 @@ interface Props {
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}
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const { frontmatter, post } = Astro.props as Props;
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const { title, description, useKatex = false } = frontmatter;
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const { title, description, useKatex = false, useD3 = false } = frontmatter;
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let documentTitle = title;
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if (post?.collection === "git" && post?.slug) {
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@ -49,6 +49,7 @@ const topicColor = getTopicColor(post?.collection);
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/>
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)
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}
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{useD3 && <script src="https://d3js.org/d3.v7.min.js" is:inline />}
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<slot name="head" />
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</Fragment>
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