Question: Not sure how to approach this one. From Chapter 5 can be ignored. Problem 2 Consider the Solow growth model from Chapter 5. Define the
Not sure how to approach this one. "From Chapter 5" can be ignored.

Problem 2 Consider the Solow growth model from Chapter 5. Define the percent deviation of capital at time t from steady state as Kt = Kt - K* K* 1. Derive an equation for the growth rate of capital from time t and t+ 1 in terms of parameters, Kt, and the steady state output /capital ratio Y*/ K* 1 2. What is the principle of transition dynamics? 3. Relate the equation you derived in the first part of the question to the principle of transition dynamics
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