diff --git a/posts/economics/models-of-production.html b/posts/economics/models-of-production.html index e446957..3bbc1ea 100644 --- a/posts/economics/models-of-production.html +++ b/posts/economics/models-of-production.html @@ -211,50 +211,61 @@ \bar{A}^\frac{1}{1-\alpha}(\frac{\bar{s}}{\bar{d}})^\frac{\alpha}{1-\alpha})\]
-- Using both mathematical intuition and manipulating the visualization - above, we find that: -
-- 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: \[ - \frac{Y_1}{Y_2}=\frac{\bar{A_1}}{\bar{A_2}}(\frac{\bar{s_1}}{\bar{s_2}})^\frac{\alpha}{1-\alpha} - \] -
-- We see that TFP is more important in explaining the differences in - per capital output - (\(\frac{1}{1-\alpha}>\frac{\alpha}{1-\alpha},\alpha\in[0,1)\)). - However, the Solow Model does not give any insight in to how to - alter what it considers to be the most important predictor of - output. -
++ Using both mathematical intuition and manipulating the + visualization above, we find that: +
++ 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: \[ + \frac{Y_1}{Y_2}=\frac{\bar{A_1}}{\bar{A_2}}(\frac{\bar{s_1}}{\bar{s_2}})^\frac{\alpha}{1-\alpha} + \] +
++ 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. +
+