Solow growth model 1. Production function(total; per capita) 2. Savings investment schedule 3. Depreciation 4. Steady state 5. Golden rule 6. Path from one steady state to the Golden Rule steady state
Goal Develop the Solow Growth Model How much of the economy's output should be consumed today and how much should be saved for the future? Static analysis(Ch. 3)> Dynamic
Topics 4 questions from before HW#1 Unemployment Natural rate of unemployment reasons for unemployment Frictional unemployment Wait unemployment Patterns of unemployment
The Data of macroeconomics * Measure of economic activity Gross Domestic Product(GDP) Total expenditure on domestically-produced final goods and services Total income earned by domestically located factors of production