Question: Suppose the production function takes the form: y fk = k if k 1 and y fk) = k if k 1, where > 1.

Suppose the production function takes the form: y fk = k if k 1 and y fk) = k if k 1, where > 1. Otherwise continue to assume the standard Solow model. Specifically, assume there is no technological progress, grA 0. Also assume that s < s. a. Comment on the form of the production function. First, what general aggregate production function (Y FK, L) does it derive from? Second, what economic effects could give rise to the specific form of the production function given above

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!