Unit Five
Production
UNIT FIVE
THE FIRM AND PRODUCTION
Objectives
After studying this topic you should be able to:
Explain the short run production process
Understand the different measures of efficie
Contents
Preface
Part 1.
xi
1
Introduction
Chapter 1. Economic Growth and Economic Development:
The Questions
1.1. Cross-Country Income Dierences
1.2. Income and Welfare
1.3. Economic Growth and Incom
Introduction to Modern Economic Growth
Much of the data used in this chapter comes from Summers-Hestons Penn World
tables (latest version, Summers, Heston and Aten, 2005). These tables are the result
Introduction to Modern Economic Growth
6.9. Taking Stock
6.10. References and Literature
6.11. Exercises
305
306
307
Chapter 7. Review of the Theory of Optimal Control
7.1. Variational Arguments
7.2.
Introduction to Modern Economic Growth
Assumption 1. (Continuity, Dierentiability, Positive and Diminishing Marginal Products, and Constant Returns to Scale) The production
function F : R3+ R+ is twic
Introduction to Modern Economic Growth
18.1.
18.2.
18.3.
18.4.
18.5.
Part 6.
The Bewley-Aiyagari Model
Risk, Diversification and Growth
Taking Stock
References and Literature
Exercises
Technology Dius
Preface
This book is intended to serve two purposes:
(1) First and foremost, this is a book about economic growth and long-run
economic development. The process of economic growth and the sources
of d
Introduction to Modern Economic Growth
22.2.
22.3.
22.4.
22.5.
22.6.
22.7.
Chapter
23.1.
23.2.
23.3.
23.4.
Human Capital Accumulation with Imperfect Capital Markets
Income Inequality and Economic Deve
Open Economy Macroeconomics, Chapter 2
69
To this end, consider the following parameterization of the model developed in the present chapter:
yt y = (yt1 y) + t ,
with = 0.9, y = 1, and t is distribut
Open Economy Macroeconomics, Chapter 2
39
dt equalized to zero. Combining these expressions to eliminate t yields the following optimality
condition often referred to as the Euler equation
U 0 (ct) =
Copyright 2015. Taylor and Francis. All rights reserved.
2
Corporate personality
83
Ridley, Ann, and Chris Shepherd. Company Law, edited by Ann Ridley, and Chris Shepherd, Taylor and Francis, 2015.
Pr
Open Economy Macroeconomics1
Martn Uribe2
Stephanie Schmitt-Grohe3
July 13, 2016
1
In preparation for Princeton University Press.
Columbia University and NBER. E-mail: [email protected]
3
Col
Open Economy Macroeconomics, Chapter 1
9
Fact 4 (Procyclicality Of The Components of Aggregate Demand) On average consumption, investment, exports, and imports are all positively correlated with outpu
CONTENTS
xi
13.6.14Changing the Volatility Of The Endowment Process . . . . . . . . . . . . . . 819
13.6.15Varying The Persistence Of The Output Process . . . . . . . . . . . . . . . . 821
13.7 The We
Open Economy Macroeconomics, Chapter 1
19
when applying the HP filter is that under this filter the trend moves much more closely with the
raw series.
The value of plays an important role in determini
Open Economy Macroeconomics, Chapter 1
29
are relatively shorter in emerging countries than in developed countries (16 versus 23.8 quarters).
At the same time, the amplitude of expansions is about the
79
Open Economy Macroeconomics, Chapter 2
1], where , d > 0 are parameters. Finally, assume that 1 + r = /
form (x) = [exp(x d)
and that (1 + rt1 )D1 /X1 = (1 + r )d.
1. State the households maximiza
59
Open Economy Macroeconomics, Chapter 2
equation (2.28) implies that the standard deviation of consumption changes is given by
c =
In turn, equation (2.25) implies that y
1+r
.
1+r
p
1 2 = . Then,
Open Economy Macroeconomics, Chapter 2
49
the long-run the economy settles at a lower level of external debt, whose service requires a smaller
trade surplus. Thus, a positive endowment shock produces
Introduction to Modern Economic Growth
dierent trajectories which these nations have embarked upon. In other
words, in each case we need a combination of theoretical models and empirical work.
The tr
Introduction to Modern Economic Growth
are formulated in continuous time and we will also provide a detailed exposition of
the continuous-time version of the Solow model and show that it is often more
Introduction to Modern Economic Growth
a study of economic growth, and can only be answered by developing systematic models of the political economy of development and looking at the
historical proces
Introduction to Modern Economic Growth
go hand-in-hand with increasing unemployment (see Exercise 2.13 on this model).
The Solow model demonstrated why the Harrod-Domar model was not an attractive pla
Introduction to Modern Economic Growth
The other key agents in the economy are firms. Firms, like consumers, are
highly heterogeneous in practice. Even within a narrowly-defined sector of an economy (
Introduction to Modern Economic Growth
firms is to maximize profits. Since we have assumed the existence of an aggregate
production function, we only need to consider the problem of a representative f
Introduction to Modern Economic Growth
Another example of rapid economic growth with falling real wages is provided by
the experience of the Mexican economy in the early 20th century. See GomezGalvarr