Table 2.
Parameter values and sources
| Value | Source | |
|---|---|---|
| α | 0.1 | In data, spending was 3.8 years worth of prime adult labor income; total years of prime age adult labor was 39.4. Investment rate of 3.8/39.4 = approximately 0.1. |
| β | −1.1 | Regression from NTA estimates. See text. |
| γ | 1 | Arbitrary (doesn’t matter) |
| δ | 0.33 | Mankiw, Romer, and Weil; consistent with micro–level empirical literature when translated into macro context. |
| a 0 | 0.5 | Estimated NTA consumption profile for developing countries. |
| a 2 | 1.0 | Estimated NTA consumption profile for developing countries. |