System Parameters

Production

Consumption

Symbol

Value

Symbol

Value

Total factor productivity

A1

1

A2

1

Unit cost of capital

wK1

10

wK2

3

Unit cost of labor

wL1

3

wL2

1

Output elasticity of capital

α1

0.6

α2

0.2

Output elasticity of labor

β1

0.4

β2

0.8