(Solved):4) Solow Model Golden Rul


Q: Question 4

4) Solow Model Golden Rule problem: A country's production function is Y = K²L!2_ the
labor force is fixed, and capital depreciates at the rate of 5 percent (8 = 0.05) each year.
Calculate the steady-state values of capital per worker (k), output per worker (y), and
consumption per worker (c) assuming the savings rate (o) is consistent with the Golden
Rule steady state.
k** =
y** =
c** =


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