Q2 Characterize graphically the dynamics of Solow-model (hint: draw the fundamental equation to k, kspace). Show where the steady state is. Q3 Why is there no steady state for aggregate variables (Y,K,I,C)? At what rate do they grow on the so called balanced growth path?

Solow-Model Assume a standard Solow-model with population and technological growth. Population (N+) grows at rate n: N4+1 = (1+n)N and labor-augmenting technology (At) grows at rate g. At+1 = (1 + n)A Production technology is of Cobb-Douglas form: Ye = z;K; (A_N_)1-a where 0