partial derivative of F(∙) with respect to j = K, E, the Hamiltonian conditions are
|
∂H = |
,, , dm n |
(9) | ||
|
∂V |
O |
•■:> |
-e cυ + μ1 ∂v = o | |
|
∂H |
-∕11 = e~rt[F- - w] - μ1v |
(10) | ||
|
-μι = |
∂E |
•■:> | ||
|
E = |
∂H ⅜ι |
•■:> |
E = m(Û, V) - vE |
(11) |
|
∂H _ |
—e c + μ2 = O |
(12) | ||
|
~∂i = |
O |
•■:> | ||
|
∂H |
-μ2 = e-rt[F- - r] |
(13) | ||
|
-μ2 = |
∂K |
•■:> | ||
|
∂H |
(14) | |||
|
K = |
⅜2 |
•■:> |
K = I | |
|
with the transversality condition | ||||
Iim H(t) = O.
t→∞
The first order condition for capital respectively labor are given by
Fκ(k) = (1 + c1 ) r (15)
ʌ
Fe(k) = w + ʌ ccv r - λ + β (Û - V) + V θf3 (16)
1 — β L ∖ / _l
with F (k) [j = K, E] as marginal products and the right hand sides are marginal
costs of capital respectively labor.
After describing the intertemporal optimization problem of the representative
firm, the model has to be closed by denoting aggregate income and the budget
constraint. Factor income of the households Y is defined as the remuneration of
production factors capital and labor
Y := rK + wE
(17)
with the wage rate w.
The output is used for factor income Y, installation costs cjl and search costs
cvV :
X = Y + c1I + cvV.
(18)
Both of the last terms represent the profit income of firms that is completely used
for installation and search costs (1 — ω)Fε(k) = c√ + cυV.
17
More intriguing information
1. Gianluigi Zenti, President, Academia Barilla SpA - The Changing Consumer: Demanding but Predictable2. Publication of Foreign Exchange Statistics by the Central Bank of Chile
3. An Estimated DSGE Model of the Indian Economy.
4. Towards a framework for critical citizenship education
5. Factores de alteração da composição da Despesa Pública: o caso norte-americano
6. Optimal Tax Policy when Firms are Internationally Mobile
7. Spatial patterns in intermunicipal Danish commuting
8. The name is absent
9. The name is absent
10. Deprivation Analysis in Declining Inner City Residential Areas: A Case Study From Izmir, Turkey.