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Unformatted text preview: fundamental neoclassical growth equation, when the rate of growth of the labour force L/L is 0.02 (i.e.2 percent). f). Using the expression you have derived in (e) and assuming T = 1, find k when k = 64. Interpret your result using a diagram. g). Using the expression you have derived in (e) find the level of capital per worker in the steady state when T = 1. h). Is the savings rate in this economy the one that maximises consumption per worker in the steady state; in other words is this economy at the golden rule in (g) above? Question 2. a). Have incomes per capita in developed nations converged since 1950? b). How could we use the Solow model to explain that convergence?...
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This note was uploaded on 03/15/2012 for the course EC 111 taught by Professor Timhatton during the Spring '12 term at Uni. Essex.
 Spring '12
 TimHatton
 National Income

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