Unformatted text preview: over time, but in a way that is completely determined ahead of time by the model builder. Ex: Assumption that the population will grow at a constant rate-Endogenous variable: when a model operates on the exogenous variables and parameters in order to generate outcomes. Ex: level of the wage and the level of employment. Features of U.S. graph-The overall upward trend due to economic growth-The short-run fluctuations in economic activity o Potential output measures the way per capita GDP would evolve if prices were completely flexible and resources were fully employed. -The suggested question of what the future holds.-These features reflect the structure of the book...
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- Spring '11
- Economics, per capita, Endogenous growth theory, Exogenous variable refers, studies key questions