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Expert Q&A Done good weekend! Problem 1 me an economy is populated by L workers with total capital sock K. Production economy is organised by Y-kili. Suppose household's saving rate 06 and depreciation rate of capital 6 01. The rule form ation of captain per weer is of the time to build type Aki k Standard Transformation of the Production Function Show that the production function is constant return to scale (CRS). b. Rewrite the production function in per worker terms e. Define the seady state in your own words Computing the Steady State Variables d. What is capital per worker in the steady state? e. What is the corresponding output per work, consumption per work, and even investment per work in the steady state? Comparative Statics across Steady States A m hosholde becomes more inclined to save in this economie, -07, what would be the corresponding capital per worker and o ption per wor t h Headly wate? Provide intuition for your results Asume capital depreciate in a fast pace, le 02. what would be the one capital worker in the new wody w Provide intuition for your Golden Rule w erer Golden Rule der Golden mption per worry choosing the Transitional Dynamics Bypothetical way will Q Search or type URL

Answer 1

Y=xEk s=0.6 d=011 Flok, AL) = (K) 2 (AL)²2 skrur-df/k,c) This constant y Kich k² y=f() = k'e erotwent scale. At steady state, o capital peu worker is zuo or capital pen wooker is constant ie Incut=depreciation At skaly slak sy=sk = 0.6 k²_olk 6 = k2 TR=36] y = x ² =6= Output per worker at steady state conspn = 0.4167= 9.4 Inesmet = 0.66)=3.6 pu worker.