EconReimu Profile Banner
Reimu Profile
Reimu

@EconReimu

Followers
2K
Following
4K
Media
227
Statuses
1K

An economist in training. Take it easy!

Gensokyo
Joined April 2023
Don't wanna be here? Send us removal request.
@EconReimu
Reimu
5 days
RT @EconReimu: If we draw lines from the "Apex" of the Hayekian Triangle to EVERY point on AB (spending on final good), EACH LINE must all….
0
2
0
@EconReimu
Reimu
7 days
RT @Insane_Econ: "Do you like peaches? How came you to like them? How came you to have two hands instead of three? What can you do about th….
0
1
0
@EconReimu
Reimu
7 days
Roundabout methods of travel.
@TerribleMaps
Terrible Maps
8 days
Fun Fact: you can drive for almost 74 hours without leaving Germany
Tweet media one
1
1
20
@EconReimu
Reimu
9 days
RT @realDavidBJr: There is Bohm-Bawerk but did you know about his cousin Buh-Duhmtis.
0
4
0
@EconReimu
Reimu
13 days
Teddy Roosevelt was shot in the chest while giving a speech. He only survived because his copy of George Reisman's Capitalism was in his pocket.
Tweet media one
3
5
54
@EconReimu
Reimu
14 days
Exactly
Tweet media one
@GigaBasedDad
Giga Based Dad
20 days
Exactly
Tweet media one
2
4
58
@EconReimu
Reimu
15 days
RT @FAHayekSays: The New York Times did Hayek dirty with this photo 💀
Tweet media one
0
18
0
@EconReimu
Reimu
21 days
Happy Fourth of July.
0
0
12
@EconReimu
Reimu
1 month
Errata: in [2/13], the capital stock should change according to:.ΔK = (1+c) × K.
0
0
5
@EconReimu
Reimu
1 month
The only way to actually increase the rate of economy growth is to increase the rate at which the capital stock grows 'c'. Trying to improve fertility is futile and has no long-term effects. [13/13]
Tweet media one
1
0
5
@EconReimu
Reimu
1 month
Therefore, any increase in the fraction of resources dedicated to human reproduction (r) will have only TEMPORARY effects on economic growth. In the long-term, total output grows at the capital stock growth rate 'c', regardless of the size of r. [12/13]
Tweet media one
1
0
5
@EconReimu
Reimu
1 month
In the Steady State, people are still being born thanks to the resources dedicated to reproduction, but output-per-capital f(l) does not change. Since output-per-capital f(l) is fixed, total output F(L,K) increases UNIQUELY according to rate rate of growth of capital c. [11/13].
1
0
4
@EconReimu
Reimu
1 month
Notice that the economy converges towards l*. When l < l*, then l increases. When l > l*, then l decreases. When l = l*, then l does not change. Because of this tendency, we say that the economy ends up in the Steady State in the long-term. [10/13]
Tweet media one
1
0
4
@EconReimu
Reimu
1 month
When r×f(l) = (c+δ)×f(l), then labor-per-capital stays constant. We will call this level of labor-per-capital: l*. At the level l*, the economy is in a "Steady State": labor-per-capital stops increasing or decreasing, and a fortiori output-per-capital also stops changing. [9/13]
Tweet media one
1
0
4
@EconReimu
Reimu
1 month
and (2) replace the fraction of the labor force that died, which is the rate δ. When r×f(l) < (c+δ)×f(l), then labor-per-capital increases. When r×f(l) > (c+δ)×f(l), then labor-per-capital decreases. [8/13].
1
0
4
@EconReimu
Reimu
1 month
This line represents the number of resources that must be dedicated to reproduction (r) to keeps labor-per-capital (l) constant. Labor-per-capital will not change if the number of new people is just sufficient to (1) furnish the new capital, which grows at the rate c . [7/13].
1
0
4
@EconReimu
Reimu
1 month
Therefore, the labor force evolves each year according to the number of births minus the number of deaths. Mathematically:.ΔL = r×f(l) - δ×L. Now, lets draw a line using the formula: (c+δ) × f(l). [6/13]
Tweet media one
1
0
4
@EconReimu
Reimu
1 month
For simplicity, lets assume that 1 unit of resource dedicated to reproduction corresponds to 1 birth. annual births = r × f(l). People are not immortal, so let δ represent the fraction of the labor force that dies each year. annual deaths = δ × L.[5/13].
1
0
4
@EconReimu
Reimu
1 month
Malthus says that higher economic productivity increases the fertility rate. Indeed, more economic output means more resources dedicated to human reproduction. Let 'r' to represent the annual fraction of resources dedicated to reproduction. Dedicated resources = r × f(l).[4/13]
Tweet media one
1
0
4
@EconReimu
Reimu
1 month
We can rewrite the production function in "per-capital" terms. K drops out of the equation and we have output-per-capital as a function uniquely of labor-per-capital. (Using lowercase for per-capital). The function becomes: f(l), where increasing l has diminishing returns. [3/13]
Tweet media one
1
0
4