# HW6 - Homework 6(Due March 13 1 Refer to Question 5 in...

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Homework 6 (Due March 13) 1. Refer to Question 5 in Homework 5. Maintain everything there but now set 0.3. (1) Compute k t ,for t from 0 to 2. Then compute the growth rate of k ,for t from1to2 . (2) Compute the steady k and y . 2. Refer to Question 5 in Homework 5. Maintain everything there but now set A t 10 1.01 t . (1) Suppose the economy is already in the steady state at t 0. Compute k 0 , k 1 ,and y 0 . Then compute the national saving rate at date 0. (As in the Solow model, in case A t 1 t A 0 , the economy is in the steady state at t if y t 1 / y t k t 1 / k t , which implies k t 1 / k t 1 1 1 . To solve the steady-state k t , substitute the steady-state relationship k t 1 k t 1 1 1 into the transitional equation k t 1 1  1 A t k t . Also, because Nk t 1 Nk t is the national savings at t , N k t 1
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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.

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