Consider the following numerical example using the Solow growth model. Suppose that F (K, N) = ZK2N2 Furthermore, assume that 5% of the capital is lost each period due to depreciation, the population grows by 1% each period, the consumer in this economy saves 20% of his income and the total factor productivity is z 2. The unit period is one year. Find the steady state per-capita quantity of capital (k*), production (y*) and consumption (c*) Find the steady state quantity of capital per worker that maximize consumption per 1. 2. worker in this modei. Derive the golden rule steadv etate per-capita consumption (c**), production (y**) and saving (s**: 3.
Consider the following numerical example using the Solow growth model. Suppose that F (K, N) = ZK2N2 Furthermore, assume that 5% of the capital is lost each period due to depreciation, the population grows by 1% each period, the consumer in this economy saves 20% of his income and the total factor productivity is z 2. The unit period is one year. Find the steady state per-capita quantity of capital (k*), production (y*) and consumption (c*) Find the steady state quantity of capital per worker that maximize consumption per 1. 2. worker in this modei. Derive the golden rule steadv etate per-capita consumption (c**), production (y**) and saving (s**: 3.
Chapter20: Economic Growth In The Global Economy
Section: Chapter Questions
Problem 5P
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