**Unformatted text preview: **k at t , for t from 1 to 5. (2) Suppose the economy is already in the steady state at t = 0 . Compute y t , for t from 0 to 5. Then compute the growth rate of y at t , for t from 1 to 5. (As in the Solow model, in case A t = (1 + g ) t A , if the economy is in the steady state at t , then y t +1 k t +1 = y t k t and so k t +1 k t = (1 + g ) 1 1 − β . ) 4. Let α = 0 . 5 and A t = 10 × (1 . 01) t . (1) Let k = 1 . Compute k t , for t from 0 to 5. Then compute the growth rate of k at t , for t from 1 to 5. (2) Suppose the economy is already in the steady state at t = 0 . Compute y t , for t from 0 to 5. Then compute the growth rate of y at t , for t from 1 to 5. 5. [pages 13-14, 3] A2, A3, A5. 1...

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- Spring '07
- MBIEKOP
- Macroeconomics, Thermodynamics, Solow