ECN101_PS6_w08

ECN101_PS6_w08 - This problem set is collected and graded...

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This problem set is collected and graded. Due is Tuesday, Feb 26 in class. ECN101 Problem Set 6 Instructor: Masako Miyanishi 1. We replicate Solow model numerically. You may want to work on excel sheet (if you have any question about excel, let me know). You can work with a calculator as well. Assume that an economy’s production function is Y=K 1/2 L 1/2 . First we consider capital accumulation while fixing the amount of labor. Suppose the amount of labor is fixed as L =10. Saving rate for this econo my is s=0.3 and depreciation rate is δ=0.1. a. First consider nation’s total output , Y. Nation’s capital stock K is given as follows. For each level of K, compute Y and Y/L (output per worker) K L Y Y/L 0 10 10 10 20 10 30 10 40 10 50 10 60 10 70 10 80 10 90 10 100 10 110 10 120 10 130 10 140 10 150 10 160 10 170 10 180 10 190 10 200 10 b. Now consider output per worker. We can obtain “per - person” production function by dividing the above production function by L. LHS is . RHS is (K
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ECN101_PS6_w08 - This problem set is collected and graded...

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