- #1
puertocolon
- 6
- 0
So this is the basic rules:
Y=C+S
S=sY
s= S/Y= ΔS/ΔY
, v= K/Y or Y= K/v
I= ΔK
From this show that:
ΔC/C = s/v
Y,S,C, I, K represent income, consumption, savings, caiptal stock and investment. with s and v as multipliers. I am working off the harod-domar growth models which says that the growth rates of income, savings, investment are equal (s/v).
So algebraically I must also show that consumption growth rate = s/v.
Here's the proof for capital stock growth rate:
ΔK/k= I/K= S/K= (S/Y)/(K/Y)= s/v
Y=C+S
S=sY
s= S/Y= ΔS/ΔY
, v= K/Y or Y= K/v
I= ΔK
From this show that:
ΔC/C = s/v
Y,S,C, I, K represent income, consumption, savings, caiptal stock and investment. with s and v as multipliers. I am working off the harod-domar growth models which says that the growth rates of income, savings, investment are equal (s/v).
So algebraically I must also show that consumption growth rate = s/v.
Here's the proof for capital stock growth rate:
ΔK/k= I/K= S/K= (S/Y)/(K/Y)= s/v
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