Unformatted text preview: L t − 1 But if population is growing at a constant rate n , as is assumed in this model, then L t − L t − 1 L t − 1 = n i.e. L t L t − 1 = 1 + n 13 A little care is required in discrete models in terms of stocks and ﬂows (see section 1.3). Capital and labour are stocks and are deFned at the end of the period. Hence, K t and L t are capital and labour at the end of period t . ±lows, such as income, investment and savings are ﬂows over a period of time . Thus, Y t , I t and S t are ﬂows over period t ....
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- Fall '11