Non-homothetic preferences Flashcards
1
Q
Homothetic preferences
A
- Homothetic preferences that generate relative demands of goods demands of goods that depend only on relative prices not on the consumption level.
2
Q
Preferences
A
3
Q
Expenditure shares and labor shares for the non consumption sectors
A
- The nearer the consumption is to the subsistence level, the higher the consumption share is.
- => the higher the labor share is
4
Q
Euler equations
A
5
Q
Production side
A
- The same as in the multisector
- Ratios ki/li are the same across sectors
6
Q
Dynamic system
A
- Service sector grows faster than manufactures
- Agricultural sector grows slower than manufacture
7
Q
BGP
A
8
Q
Comments about BGP
A
9
Q
Consumption growth
A
10
Q
Labor shares
A
