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Update lectures/solow.md
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mmcky authored Jul 23, 2024
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Expand Up @@ -57,7 +57,9 @@ Production functions with this property include
* the **Cobb-Douglas** function $F(K, L) = A K^{\alpha}
L^{1-\alpha}$ with $0 \leq \alpha \leq 1$. Here, $\alpha$ is the output elasticity of capital.
* the **CES** function $F(K, L) = \left\{ a K^\rho + b L^\rho \right\}^{1/\rho}$
with $a, b, \rho > 0$. Here, $\rho$ is a parameter that determines the elasticity of substitution between capital and labor.
with $a, b, \rho > 0$.

Here, $\rho$ is a parameter that determines the elasticity of substitution between capital and labor.

We assume a closed economy, so aggregate domestic investment equals aggregate domestic
saving.
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