The change in k ("Triangle" k) is equal to investment minus depreciation, or i-dk. In a steady state, k doesn't change, so i-dk=0, or i=dk. Earlier in the video I show how to put i as a function of k, so you set i(k)=dk and then solve for k. I don't think I ever set k to zero. Perhaps you are referring to setting the change in k to zero?
@@MattBirch I was just thinking of the algebra of getting from 0,3k^0,5=0,1k, to 3=k^0,5. It's just my algebra thats a little rusty so figured it out. Your videos are really helpful so thanks for providing :)
@@olaangeltvedt8813 Oh I get your question now. I forget that some other places use commas there instead of decimals. Basically I just multiplied both sides of the equation by 10. The equation is till equal, but the numbers are easier to work with.
It pretty much is. It is a specific condition that has to hold in order for those specific outcome to hold. It doesn't have to hold. But this video shows what happens in this model if it does.
Investment is based on an exogenous savings rate. When you have a low capital stock, there is not much depreciation since there is not much capital to depreciate. When you have high capital stock there is a lot of depreciating. Hope that helps.
it is very understandable and simple video for solow model thank you
Awesome. Thanks and you're welcome!
At 9:08 why did the "k" disappeared? i thought it would be "k/k^(1/2)"
@@gustavokenobi4599 for the k, I just divided both sides by k^0.5, which left no k on the left and a k^0.5 on the right.
@@MattBirch Dude thanks a lot you're awesome :))
@@gustavokenobi4599 my pleasure. And thanks!
Thank you so much sir finally i got it
Awesome! I am glad to hear that.
thank you this really helped me out
Glad to hear it! Good luck. (And you're welcome!)
At 9:10, how do you get to 3=k^0,5. What happens to the k initially multiplied by 0,1?
The change in k ("Triangle" k) is equal to investment minus depreciation, or i-dk. In a steady state, k doesn't change, so i-dk=0, or i=dk. Earlier in the video I show how to put i as a function of k, so you set i(k)=dk and then solve for k.
I don't think I ever set k to zero. Perhaps you are referring to setting the change in k to zero?
@@MattBirch I was just thinking of the algebra of getting from 0,3k^0,5=0,1k, to 3=k^0,5. It's just my algebra thats a little rusty so figured it out. Your videos are really helpful so thanks for providing :)
@@olaangeltvedt8813 Oh I get your question now. I forget that some other places use commas there instead of decimals. Basically I just multiplied both sides of the equation by 10. The equation is till equal, but the numbers are easier to work with.
thank you this helped a lot.
Glad to hear it. Good luck!
I dont know if anyone has asked this question, but is Z = 1/L an assumption, felt it just came out of the blue
It pretty much is. It is a specific condition that has to hold in order for those specific outcome to hold.
It doesn't have to hold. But this video shows what happens in this model if it does.
why investment is more than depreciation when less than the steady state level of capital? (vice versa)
Investment is based on an exogenous savings rate. When you have a low capital stock, there is not much depreciation since there is not much capital to depreciate. When you have high capital stock there is a lot of depreciating. Hope that helps.
@@MattBirch It helps! Thanks for the complete explanation😄
@@ahherng9822 my pleasure. Good luck.
What book are you referring to?
My class was using Mankiw's Macroeconomics.