An economy has the per-worker production function y = 2k-/3 where y is output per worker...

 

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An economy has the per-worker production function y = 2k-¹/3 where y is output per worker and k is capital per worker. Capital accumulation follows: k= sy-(n+8)k The saving rate s is 0.2, the depreciation rate & is 0.04, and the population growth rate n is 0.01. a. What are the steady state values of capital per worker, output per worker, and consumption per worker? b. Repeat Part (a) for a saving rate of 0.3 instead of 0.2. c. Repeat Part (a) for a population growth rate of 0.02 (with a saving rate of 0.2). d. Repeat Part (a) for a production function of e. Suppose the economy is not in the steady state. Derive the growth rate of capital per worker (4) along the transition path as a function of k, s, n and 6. Under what condition is positive? What is the relationship between and k? An economy has the per-worker production function y = 2k-¹/3 where y is output per worker and k is capital per worker. Capital accumulation follows: k= sy-(n+8)k The saving rate s is 0.2, the depreciation rate & is 0.04, and the population growth rate n is 0.01. a. What are the steady state values of capital per worker, output per worker, and consumption per worker? b. Repeat Part (a) for a saving rate of 0.3 instead of 0.2. c. Repeat Part (a) for a population growth rate of 0.02 (with a saving rate of 0.2). d. Repeat Part (a) for a production function of e. Suppose the economy is not in the steady state. Derive the growth rate of capital per worker (4) along the transition path as a function of k, s, n and 6. Under what condition is positive? What is the relationship between and k?

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a Setting the capital accumulation equation to 0 we ... View the full answer