Business, 18.11.2019 19:31 harkey

Consider an economy that is described by the production function y = k^1/3 l^2/3. moreover the depreciation rate of capital is delta = 0.05 and the population growth rate is n = 0.05 (there is no technology growth) (a) what is the per-worker production function, that is y = y/l? what is the marginal product of capital, that is partial differential y/partial differential k? (b) if the saving rate is s = 0.4, find the steady state level of capital per worker k. what is the steady state level of consumption per worker c? what is the steady state level of investment per worker i? what is the steady state level of output per worker y? (c) find the golden rule level of capital per worker k_g, i. e. the steady state level of capital per worker that yields the highest steady state consumption per worker. find also the golden rule consumption per worker level c_g that corresponds to this capital per worker and compare it to the one in question b. is c_g higher than c? (d) find the savings rate s_g that guarantees that we will reach the golden rule capital per worker k_g. (e) if the government decides to implement policies that change the savings rate from s = 0.4 to s_g, what will be the immediate impact of this policy change on c, i and y? what will be the impact in the long run? (provide numbers for both the immediate impact and the long run impact) what is the growth rate of gdp per worker in the long run? the growth rate of aggregate gdp?

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Consider an economy that is described by the production function y = k^1/3 l^2/3. moreover the depre...

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