3. Numerical simulation. Consider the following Solow growth model: Yt = 10 * kt kt+1=kt -...
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3. Numerical simulation. Consider the following Solow growth model: Yt = 10 * √kt kt+1=kt - 0.1kt + 0.2yt ko = 50 where, kis capital per worker at time t, and y, is output per worker. What are the savings and depreciation rates? b. In a spreadsheet, calculate {yt, kt} for t=0,1,2,...100. c. Present a scatter plot of {yt, kt}, with k on the x-axis. d. Present a time series graph of {yt, t} with t on the x-axis. What happens to the growth rate of yt over time? e. Do y and k approach a steady state over time? If so, what is this steady state? 3. Numerical simulation. Consider the following Solow growth model: Yt = 10 * √kt kt+1=kt - 0.1kt + 0.2yt ko = 50 where, kis capital per worker at time t, and y, is output per worker. What are the savings and depreciation rates? b. In a spreadsheet, calculate {yt, kt} for t=0,1,2,...100. c. Present a scatter plot of {yt, kt}, with k on the x-axis. d. Present a time series graph of {yt, t} with t on the x-axis. What happens to the growth rate of yt over time? e. Do y and k approach a steady state over time? If so, what is this steady state?
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a The savings rate is 02 and the depreciation rate is 01 b I have simulated the Solow gr... View the full answer
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