Government in the neoclassic growth model.
Assumptions:
1. g(t)=gov spending per efficient unit of labor=G(t)/[A(t)L(t)]
2. t(t)=lumpsum taxes per efficient unit for labor=T(t)/[AL]
3. government runs a balanced budget t=g
4. government spending (g) has no effect on f'(k(t))
Why assumption 4 is reasonable and necessary?



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