From d783d83f891234d313d9005b429f75f8b8ce4bec Mon Sep 17 00:00:00 2001 From: JingkunZhao Date: Wed, 24 Jul 2024 17:02:56 +1000 Subject: [PATCH] Revise context --- lectures/solow.md | 4 ++-- 1 file changed, 2 insertions(+), 2 deletions(-) diff --git a/lectures/solow.md b/lectures/solow.md index c967ac34..0a5160b0 100644 --- a/lectures/solow.md +++ b/lectures/solow.md @@ -55,11 +55,11 @@ $$ 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. + L^{1-\alpha}$ with $0 \leq \alpha \leq 1$. * 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. +Here, $\alpha$ is the output elasticity of capital and $\rho$ 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.