excelsolow - (2) Solow Model with population growth and...

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Economic Growth Maria Muniagurria Notes on Excel Simulations of Solow Model Basic Equations: (1) Y = K " (AL) 1- " v v (2) L = n , A = g (3) S= s Y v (4) K t = s (Y t /K t ) - * v (5) K t+1 = (1+K t ) K t v (6) L t+1 = (1+L t ) L t = (1+n) L t v (7) A t+1 = (1+A t ) A t v (8) y t = (y t+1 - y t ) / y t (9) y = Y/L, k= K/L We assume that population (N ) is equal to the labor force (L) There are 3 countries (USA, Foreign 1, Foreign 2) The program shows the following variables for each country for 100 periods: v v y y Y/AL K/AL Y K AL L A K
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SIMULATIONS For all countries and in all cases: " = 0.35 * = 0.02 K 0 = 1 L 0 = 10 (1) Solow Model with population growth and without technological change : countries differ in their rate of population growth . v All countries A=0 A 0 = 1, s= 0.10 v v v USA: L = 0.10 Foreign 1: L = 0.05 Foreign 2: L = 0.15
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Unformatted text preview: (2) Solow Model with population growth and without technological change :countries differ in their savings rates . v v All countries: A=0 , L= n= 0.10 , A = 1 USA: s = 0.10 Foreign 1: s = 0.15 Foreign 1: s = 0.05 (3) Solow Model with population growth and technological change :countries differ in their initial technology level . v v All countries: A=0.02 , L= n= 0.10 , s = 0.10 USA: A = 8 Foreign 1: A = 4 Foreign 1: A = 2 (4) Solow Model with population growth and technological change :countries differ in their savings rates . v v All countries: A=0.02 , L= n= 0.10 , A = 8 USA: s = 0.10 Foreign 1: s = 0.15 Foreign 1: s = 0.05...
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excelsolow - (2) Solow Model with population growth and...

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