Consider the following Solow growth model without technological progress:
Verify that F(zK,zL) = zF(K,L) "z; FK >0; FKK<0; and F(K,0) = F(0,K) = 0.
Derive the differential equation that describes how per-capita capital
(k = K/L) changes over time in this model: dk/dt = g(k).
Calculate the steady state per-capita values of capital, income, and consumption: .
Verify that the growth rate of per-capita income declines as the
economy approaches its steady state: .
What is the growth rate of per-capita income (Y/L) in the steady
state? What is the growth rate of aggregate income (Y) in the steady
state?
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