Question: I could really use some help Consider a closed economy with the Cobb-Douglas production function Y = K9-3H9-4(AL)9-:= where K is the physical capital stock,

I could really use some help

I could really use some help Consider a closed economy with the

Consider a closed economy with the Cobb-Douglas production function Y = K9-3H9-4(AL)9-:= where K is the physical capital stock, H is the human capital stock, A is the TFP, and L is the labor supply. The TFP growth rate is given by g. The population growth rate is given by n. The depreciation rate for the physical capital stock is 95 and the depreciation rate for the human capital stock is g. Physical capital stock investment is denoted by IK and the human capital stock investment is denoted by IH. The saving rate for the physical capital stock is given by g3 and saving rate for the human capital stock is given by sgg Let SK = 5X'= IK and SH = sh! = IH. [Hintz The law of motion for human capital stock is similar to that of the capital stock]. (a) Starting from the aggregate laws of motions for physical capital stock and for human capital stock, calculate the steady state equilibrium values for h = H/AL and k = K/AL . (b) Calculate the steady state equilibrium value of the output per person (y = Y/;=; (c) Let n = 0, A = 1, Qt = 95 = d, and d + g = 0.05. Now assume that there are two different countries (they are identical except the saving rates) named Happy-Land and Nice-Land. Happy-Land has gg = 0.2 and g5 = 0.1. Nice-Land has gg = 0.1 and s5 = 0.2. Which country has a higher steady state value of y? Why

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