An economy has the per-worker production function y = Akcx where y is output per worker and k is capital per worker; A = 8 and a = 0.4. Capital accumulation follows: k = sy- (n+8)k The saving rate s is 0.12, the depreciation rate & is 0.05, and the population growth rate n is 0.02. a. What are the steady state values of capital per worker, output per worker, and consumption per worker? b. Repeat Part (a) for a saving rate of 0.2 instead of 0.12. c. Repeat Part (a) for a population growth rate of 0.01 (with a saving rate of 0.12). d. Repeat Part (a) for a production function of y = 15k04 (with a saving rate of 0.12 and population growth rate of 0.02)

An economy has the per-worker production function y = Akcx where y is output per worker and k is capital per worker; A = 8 and a = 0.4. Capital accumulation follows: k = sy- (n+8)k The saving rate s is 0.12, the depreciation rate & is 0.05, and the population growth rate n is 0.02. a. What are the steady state values of capital per worker, output per worker, and consumption per worker? b. Repeat Part (a) for a saving rate of 0.2 instead of 0.12. c. Repeat Part (a) for a population growth rate of 0.01 (with a saving rate of 0.12). d. Repeat Part (a) for a production function of y = 15k04 (with a saving rate of 0.12 and population growth rate of 0.02)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 1P

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