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5.15. The derivation of the log-linearized equation of motion for capital. Con- sider the equation of motion for capital, K+1 = K₁+ K(AL)-- C- G₁-8K. (a) (i) Show that ln K+1/oln K, (holding At, Lt. Ct, and G, fixed) equals (1++)(K/K+1).

5.15. The derivation of the log-linearized equation of motion for capital. Con- sider the equation of motion for capital, K+1 = K₁+ K(AL)-- C- G₁-8K. (a) (i) Show that ln K+1/oln K, (holding At, Lt. Ct, and G, fixed) equals (1++)(K/K+1).

Macroeconomics: Private and Public Choice (MindTap Course List)
Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
ChapterST3: The Stock Market: Its Function, Performance, And Potential As As Investemtn Opportunity
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5.15. The derivation of the log-linearized equation of motion for capital. Con- sider the equation of motion for capital, K+1 = K; + K(A;L)- - C- G- SK. (a) (i) Show that ô In K,+1/0ln K, (holding At, Lt, C, and G, fixed) equals (1 +r+1)(Kt/Kt+1).
Transcribed Image Text:5.15. The derivation of the log-linearized equation of motion for capital. Con- sider the equation of motion for capital, K+1 = K; + K(A;L)- - C- G- SK. (a) (i) Show that ô In K,+1/0ln K, (holding At, Lt, C, and G, fixed) equals (1 +r+1)(Kt/Kt+1).
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