This preview shows page 1. Sign up to view the full content.
Unformatted text preview: (instead of the usual Cobb-Douglas function). Let the labor force be constant, denoted L . (1) Verify that now K t 1 K t sA t K t 4 L K t . (2) What is the transitional equation (i.e., one pertaining to the transition of k , capital per worker) now? (Hint: Divide the equation in (1) by L and note k t K t / L .) (3) Let s 0.1 and 0.2 and A t 1 all t . Let k 1. Find the values of k 1 and k 2 . Also, find the steady state k . (As in the usual Solow model, when there is no technological progress, the economy is in a steady state from date t if k t 1 k t .)...
View Full Document
This note was uploaded on 04/02/2009 for the course ECON 3140 taught by Professor Mbiekop during the Spring '07 term at Cornell University (Engineering School).
- Spring '07