Question: thanks for the help Given the production function, y = kAl- assume that the economy is in equilibrium in year zero with gA = 0.02

thanks for the help

thanks for the help Given the production function, y = k"Al- assume

Given the production function, y = k"Al- assume that the economy is in equilibrium in year zero with gA = 0.02 S = 0.25 gL = 0.02 a = 1/3 8 = 0.08 ko = $2000 Suppose that the capital stock in place in year zero depreciates at twelve percent (rather than eight percent) and this higher rate of depreciation is permanent. 3. Calculate the level of output per worker in year two. (10 points) S EY 9L+gAt6 kt = (4)(/1-a) x At yt = (4)("/1-a) x At kt = kt-1(1 -8 - gz) + syt-1 gyt = agkt + (1 - a)gA Xtti = Xt(1 + gx)' Xt-Xt-1 gr = Ct = yt (1 - s) Xt-1

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