Question: Hi. Kindly solve these problem for me Problem 4: Solow Model with No Technological Change Assume that we live in an imaginary world where there

Hi. Kindly solve these problem for me

Hi. Kindly solve these problem for me Problem 4: Solow Model withNo Technological Change Assume that we live in an imaginary world wherethere are two countries: South and North. These two countries have thesame population size and the same parameters, but North has a largercapital stock than South Output in both countries is produced according to

Problem 4: Solow Model with No Technological Change Assume that we live in an imaginary world where there are two countries: South and North. These two countries have the same population size and the same parameters, but North has a larger capital stock than South Output in both countries is produced according to the following constant-returns-to-scale production function that lies at the heart of the standard Solow growth model: Y (t) = 10[K(t)] "-[L(t) 105 Assume that the savings rate is 13% (s = 0.13), the population grows at a rate of 2% per year (n = 0.02), and capital depreciates at a rate of 2% per year (d = 02). (a) Express the production function in per capita (y) terms (i.e., derive an expression for y as a function of k). (b) What are the steady state levels of capital per worker (KSS) and income per worker(ySS)?KSS ySS Assume that in the initial year (=0), the capital stock per worker in Cocoloco is 450 (K(0) = 450) and the capital stock per worker in Sambapati is 150 (K(0)-150). In addition, assume that the population is 1 for both Cocoloco and Sambapati (L(0)-1). (c) [4 pts] For Cocoloco, what are the total income Y(0), total saving S(0) at the end of year 0? (use two decimals for display) Y(0) S(0) (d) [4 pts] For Cocoloco, what are the capital per worker k( 1), income per capita y(1) in year 1? (Use two decimal spaces for display) k(1 ) y(1)Assume that we live in an imaginary world where there are two countries: Cocoloco and Sambapati. These two countries have the same population size, population growth, depreciation rate and production function. But Cocoloco has a larger capital stock than Sambapati. Output in both countries is produced according to the following constant-returns-to-scale production function that lies at the heart of the standard Solow growth model: Y(t) = 35[K(t) 10.5 [L(t) 10.5 where Y(t) is the aggregate output in year t, K(t) is the capital in year t, and L(t) is the labor in year t. Assume that the savings rate is 18% (s = 0.18), the population grows at a rate of 0.9 % per year (n = 0.009), and capital depreciates at a rate of 1.6% per year (d = 0.016). (a) [3 pts] Express the production function in per capita terms (i.e., derive an expression for y as a function of k, where y indicates output-to-labor ratio, and k is the capital-to-labor ratio). Just type the final expression. (non-math format is enough, for example a=(b 1/3)"c"(2/3)) (b) [4 pts ]What are the steady state levels of capital per worker (k$5) and income per worker(y $$)? (use two decimals for display) KSSLet us modify the basic Solow model to make technological progress capital augmenting rather than labor-augmenting. So that a balanced growth path exists, assume that the production function is Cobb-Douglas: Y (t) - [A(tK (t ) 192 (2 ) " Oxx

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