From the above discussion of national income here the consumption theory suggests the Earning is not equal to spending in the consumptive area which is ever lessening with the high inflationary activity,in the scenario the case may happen in such a way that no recovery from the inflationary rate occurs hence there might be a static poverty line will be there if that grows for 3 years we will be falling under below poverty line and death may be taking place. Hence,Solos model suggests me the vital case in life,post Covid.
Hi. Yes apologies that I wasn't very clear there with my notation. i=y-c=sy is correct, and investment = saving (S). It should be a capital S for saving, and a lower case s for the saving rate. I hope this makes sense
Does growth models somehow take into account that units of output becomes more complex as t increases or does it just assume they stay homogeneous? I know the vertical axis lists homogeneous units of output so I was wonder how complexity of output enters into it... Or does it just not?
Hi. I'm not sure exactly what you mean by the complexity of units of output. If you mean that over time our economy becomes more diverse and produces a wider range of products, then this does not enter into this model. We have assumed one homogeneous output good, and this assumption holds over all time periods. However, Solow is a very simplistic model and there are newer models that allow for multiple output goods. We could also create a model where output gets more complex over time, but this would be quite complicated to do.
Very Informative!!!!!!
From the above discussion of national income here the consumption theory suggests the Earning is not equal to spending in the consumptive area which is ever lessening with the high inflationary activity,in the scenario the case may happen in such a way that no recovery from the inflationary rate occurs hence there might be a static poverty line will be there if that grows for 3 years we will be falling under below poverty line and death may be taking place.
Hence,Solos model suggests me the vital case in life,post Covid.
hi very nice and very informatice... which book do you follow, and also recommend us ?
At 11:32 you say i=sy and you also say i=s.
That is confusing me because it looks mathematically incorrect.
Hi. Yes apologies that I wasn't very clear there with my notation.
i=y-c=sy is correct, and investment = saving (S).
It should be a capital S for saving, and a lower case s for the saving rate.
I hope this makes sense
@@EverythingEcon Thanks!
Does growth models somehow take into account that units of output becomes more complex as t increases or does it just assume they stay homogeneous? I know the vertical axis lists homogeneous units of output so I was wonder how complexity of output enters into it... Or does it just not?
Hi. I'm not sure exactly what you mean by the complexity of units of output. If you mean that over time our economy becomes more diverse and produces a wider range of products, then this does not enter into this model.
We have assumed one homogeneous output good, and this assumption holds over all time periods. However, Solow is a very simplistic model and there are newer models that allow for multiple output goods. We could also create a model where output gets more complex over time, but this would be quite complicated to do.
@@EverythingEcon Oh I see yea, thanks for that.
Good