You… are absolutely right. That’s a very good catch. I think your calculation is correct, as the utility translation only happens twice—utility from productivity growth, which I adjusted, and utility from cash transfers, which I did not. Everything else is unchanged from the original framework.
You’re definitely right that it matters whether this is global average/median/poverty level. I think that the issue stems from using productivity A as the input to the utility function, rather than income. This is not an issue for log utility if income is directly proportional to A, since it cancels out, but it is probably better to redo this with income statistics/income growth and see how that changes things.
I’ll make a note about this at the top of the post and update it with a more substantive change to the conclusion when I’ve dug into it further.
You… are absolutely right. That’s a very good catch. I think your calculation is correct, as the utility translation only happens twice—utility from productivity growth, which I adjusted, and utility from cash transfers, which I did not. Everything else is unchanged from the original framework.
You’re definitely right that it matters whether this is global average/median/poverty level. I think that the issue stems from using productivity A as the input to the utility function, rather than income. This is not an issue for log utility if income is directly proportional to A, since it cancels out, but it is probably better to redo this with income statistics/income growth and see how that changes things.
I’ll make a note about this at the top of the post and update it with a more substantive change to the conclusion when I’ve dug into it further.