macro1 - capitalist always save. It is the distribution of...

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Soviets use input/output table because 1) Constant Returns to Scale 2) Technology in fixed 3) Aggregation causes problems from the input side as well as output side Combine all these to minimize costs. Crocodile Joke: the firm fulfilled their obligations even though the materials produced were not specifically what the firms wanted. Growth Theory: General Theory-Kenynes said free market will get stucks. If full employment is achieved, what happens after? To have equilibrium savings=investments. Savings=sY Investment=iY sY = depreciation +new investment (nI) see notes Two theories: Keldor: saving rate changes. Due to the classical assumption that workers always consume,
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Unformatted text preview: capitalist always save. It is the distribution of the change in income of workers and capitalist that provide stability. Solow: quantity changes. See graph 1) All economies face zero growth regardless of s.q. 2) Poor economies should grow fastest. 3) The steady state growth must be rising as long as technology is improving 4) Flow of international capital to equalize MPK. Input-Output Model 1, Sustained growth cannot happen just by uncertainty 2, Technological growth change is zero. Beware of people who write well—sending out a subliminal message....
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This note was uploaded on 09/21/2011 for the course ECON 499 taught by Professor Tba during the Spring '11 term at UChicago.

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macro1 - capitalist always save. It is the distribution of...

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