Dude, thanks. Seriously, just thanks. I'm a Berkeley student, taking a summer macro course and your lecture is gold. Clean, efficient, and thorough. So honestly, thanks you.
Go Bears! Took me a second to understand what this reply was from or about. Hopefully this video helps you out in the same way that it did for me way back then. Good luck to you fellow Bear, you got this!
Thank you, that is very nice of you to say. As a TA with many students, I wish people would start posting more comprehensive collections of lectures one specific topics (it seems like everyone and their mother makes a short 2 minutes review video on some massive topic... not too helpful for students like yourself!) Best of luck with your summer session course.
Regrading the error you pointed out - I think you're right. The 5th line of that calculation has L^(-a) in the denominator when it should be raised to a positive a. (I did my best, but no doubt there are a few more errors like that, I wish I could create an incentive system to point them all out to me!) Regarding the videos, I'm glad you like them. It seems there are plenty of "intro to" and "a brief overview of" videos out there. Not enough of the nitty gritty you'd need to know on an exam.
I'm pretty sure I cover that question throughout the video series...... Be sure to pay close attention to the capital accumulation equation (the LOM of Capital equation).
"s" is savings -- the savings rate. The savings rate is the port of people's income (Y or y per capital) that people don't consume, and instead people convert into new capital. It's exogenous (that is, it's taken as given) the savings rate is pretty central to the solow model, so be sure to look it up. My video description has a link to more videos, many of which work with teh savings rate. good luck!
Thank you for taking the time to make these videos. I must say you did a terrific job! You managed to explain the entire model in a very elegant, no-nonsense way (something that the uni professors don't always succeed to do). ;) thanks again. Any hope you'll do the Ramsey model as well? ;)
sorry mate, I deleted my previous comment by accident, but again thanks for these series of videos. And yes I will start my first course in econometrics in a couple of weeks, I hate Stata and I'll try to do most of it in R. Cheers
Your videos on the solow model is great. I really enjoy your the way you explain the material, but is there any way i could get the notes for personal use?
I have actually covered this in a number of videos. Check out the link in the video description "More Videos on the Solow Model" The answer to your question depends (slightly) on the type of Solow model we're working with (i.e. simple solow, solow iwth pop growth, or solow with pop and tech growth).
Very well explained! Do you have something on Calculus of Variations and Optimal Control?? Please keep adding videos for Masters level topics (David Romer)
Nice video. I'm looking at Romer's book, Advanced maroeconomics, where technology (A) is also included as a variable. Is technology also endogenous? :) Thank you.
Erma Emmita 11:00 presumably because it produces a graph that increases but at a decreasing rate - diminishing marginal returns. Just a guess though so may be wrong
Just a question if you sub in the equations of Ct and It into the Yt=Ct+It, you get Yt = (1-s)Yt +sYt so for any value of s, sYt cancels out the -sYt....? For some reason this appears a little problematic to me....could someone explain to me where I have gone wrong ?
also, (1-s) is essentially the marginal propensity to consume and s is marginal propensity to save. Look up for 'marginal propensity', it's Keynesian economic. :)
The alpha is standing for the ratio of capital on the total of the factors of production in the economy. If you have 30 machines and 70 workers: alpha is 30/(30+70) = 0.3
19:11 - You say that 'steady state' is K(t+1)=K(t). But if population is growing, that means that people are getting poorer. K/L as L->infinity - little k -> zero. Not much of a steady state.
You actually did not say that K(t+1)=K(t). You end up, in the next video, actually, defining k(t+1)=k(t) as steady state. So I'm ok. Also, you are assuming zero population growth. ok.
Assaf Wodeslavsky (Man, I'm hating these google+ comments, I don't really get alerted to them anymore!). Anywoo, thanks for the comments. I try to start off slow with this video, and thus don't introduce pop growth until much later. That arrant 's' you and Mutale Michelle pointed out is something else (a confusing typo on my part)
hi. You are right. Yt = (1-s)Yt + sYt. Expanding the equation: Yt = Yt - sYt + sYt, and we end up with Yt = Yt. You may want to see the intuition of this. (1-s)Yt is simply the portion of income you don't save and instead, you spend it (in other word, consume). sYt is the portion of your income you saved. So logically, the total of your income is the sum of amount of money you consumed and amount you saved. This is under the assumption of closed economy with no government.
