Thursday, September 07, 2017

Fluke Switch Points and a Real Wicksell Effect of Zero

I have put up a draft paper with the post title on my SSRN site.

Abstract: This note presents two numerical examples, in a model with two techniques of production, of a switch point with a real Wicksell effect of zero. The variation in the technique adopted, at the switch point, leaves employment and the value of capital per unit net output unchanged. This invariant generalizes to switch points with a real Wicksell effect of zero for steady states with a positive rate of growth.

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