6. Edify
To instruct especially so as to encourage intellectual, moral, or
spiritual improvement.
Edify Has Latin Roots
Edify comes from the Latin verb aedificare, meaning "to instruct or
improve spiritually"; it is based on aedes, the word for
"temple." Edify shares the spiritual meaning of its Latin root, but it is
also used in general contexts to refer to the act of instructing in a
way that improves the mind or character overall.
24. Solow Model
You must have capital to create income.
Capital has diminishing returns to income.
Your capital wears out.
You need to save a portion of your income to
replace worn out capital
25. Solow Model
Income = f(Capital)
Y = f(K)
Capital has diminishing returns
Y = f(√K)
Save from Income to replace Capital
Saving = sY
Depreciation is real
D = dK
29. Solow Growth Model
Y = √K
S = I = s√K
D = dk
Capital K
Y
Output
savings rate = 30% of income
depreciation rate = 2.5% of your capital
30. K = 100
s = .30 or 30%
d = .025 or 2.5%
Y = ?
S = ?
D = ?
Consumption = ?
Quiz
31. Solow Growth Model
Y = √K
S = I = s√K
D = dk
Capital K
Y
Output
100
10
3
2.5
savings rate = 30% of income
depreciation rate = 2.5% of your capital
Consumption
10 - 3 = 7
32. Solow Growth Model
Y = √K
S = I = s√K
D = dk
Capital K
Y
Output
144
12
3.6
savings rate = 30% of income
depreciation rate = 2.5% of your capital
Consumption
12 - 3.6 = 8.4
