Unformatted text preview: 5. In the life-cycle model, let u c yt , c ot 1 ln c yt 1 − ln c ot 1 and F A t , K t , L t A t K t L t 1 − . As in the Solow model, let y t denote the output per worker at t so that y t A t k t . Let 0.5, 0.7, A t 10 all t , and k 1. (1) Compute k t , for t from 0 to 3. Then compute the growth rate of k , for t from 1 to 3. (2) Compute the steady k and y . (As in the Solow model, when there is no technological progress, the economy is in a steady state at t if k t k t 1 .) 6. [page 12, 3] NQ 1 (a, b, c)....
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This note was uploaded on 04/02/2009 for the course ECON 3140 taught by Professor Mbiekop during the Spring '07 term at Cornell.
- Spring '07