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2007 the three largest American banks had a market value five times superior than the value of the three largest Brazilian banks, in 2009 this ratio fell to 2:1. 14. The supply-side GDP projection assumes that the marginal productivity of capital is constant (which also implies a constant incremental capital-output ratio); therefore, the stock of capital is determined endogenously. 15. Here it is important to mention that a constant marginal productivity of capital (i.e., a constant incremental capital-output ratio) could be considered an optimistic assumption that would lead to a higher GDP growth.
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