When nominal interest rates rise (ceteris paribus) this causes money demand to rise as a result. 

Robert Lucas, in “Econometric Policy Evaluation: A Critique,” contended that the best way to predict the effect of a tax cut on consumption was to look at the historical relationship between consumption and income. 

Consider a Baby Solow economy where TFP = 1, capital starts off at K0=1000, the savings rate is 50%, and the annual depreciation rate of capital is 10%. What is the steady-state capital stock? 

A country’s production function works like this each year: Y = 4K0.5 It rents capital from the rest of the world at a cost of r per unit of capital per year. Fortunately for us, capital doesn’t depreciate in this country, and since firms are profit maximizing, then MPK=r. The marginal benefit of a unit of capital is the MPK and the marginal cost of a unit of capital is r.  If the rental rate of capital is 0.1 (or 10% per year), how much capital will it rent this year, if firms in this country are profit-maximizers? 

Nobel Laureates Kydland and Prescott argued that

If capital can move easily across countries in search of the highest rate of return, then a higher tax rate on capital tends to reduce equilibrium worker wages. 

In a Solow model with competitive markets, what is alpha (α)?

According to Proto, Rustichini, and Sofianos, which is the best predictor of cooperation in a repeated prisoners’ dilemma? 

Nation W has the same steady-state capital-output ratio as the modern United States. In Nation W, the savings rate is 15%, the annual depreciation rate is 1%, and productivity never grows (z=0%). What ‘s the annual population growth rate in Nation W?

Dietz reports in Fully Grown that corporations appear to move their innovative activity from state to state partly in response to tax rates.