Wednesday, February 18, 2009

Calibrate a Solow Growth Model

You’ll get several thousand hits if you put that phrase into Google – not Paris Hilton numbers certainly, but definitely showing that a lot of people besides you are thinking about this.

A lot of these aren’t very accessible for students, but this one should appear near the top of the list Google gives you, and isn’t too unreadable. Around page 10 it talks about reasonable values for parameters.

The author is Stephen Parente – a fairly well-known young-ish macroeconomist known for his work with Edward Prescott (who won a Nobel Prize in 2004 in part for applying the Solow growth model to understanding business cycles).

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