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1. In a Solow model, the production function has the Cobb-Douglas form, Y = AKL1-a The capital depreciation rate is 8. Population growth rate is
1. In a Solow model, the production function has the Cobb-Douglas form, Y = AKL1-a The capital depreciation rate is 8. Population growth rate is n. Technology level A is constant. Let y = = and k = (1) Suppose that saving rate is s. Derive the movement equation of capital per capita, k. [5 points] (2) We denote capital per capita and output per capita in the steady state as k' and y'. Show that > 0. ds [5 points] (3) Derive the golden rule level of capital per capita, kgold. [5 points]
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