{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ps2_114 - Econ 114 Javier Birchenall Due date Tuesday...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 114 Javier Birchenall Due date: Tuesday, October 12, 2010 Problem set 2: The Solow model and savings rates The following problem set studies the Solow model and investigates the relationships between savings rates and economic growth. The data is available in an Excel spreadsheet on the class web page, econ.ucsb.edu/ ~ jabirche/teaching.html Plan to spend 8 hours on these questions. Please return the problem set on time (next Tuesday during class), remember you have the chance to miss one and only one, use it wisely. If you have any problems regarding the questions please contact me by e-mail: [email protected] . Good luck! I. The Solow model (theory) Assume that the production function is Cobb-Douglas, i.e., Y = AK α L 1 α . 1. Show that the marginal product of capital, MPK , is MPK = ∂Y ∂K = αAK α 1 L 1 α , and that capital’s share of income is MPK × K Y = α You might want to consult the Appendix to Chapter 3 in the textbook.
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern