Question
Assume that a country's Cobb-Douglas production function is Y =A K 1/3 L 2/3 . Suppose A =2 a. What is the per-worker production function
Assume that a country's Cobb-Douglas production function isY=AK1/3L2/3. Suppose A =2
a.
What is the per-worker production functiony=f(k)?[Divide through by L!]
b.
Assume that K/L =125. Calculatey = Y/L
c.
Assume that 5 percent of capital depreciates each year.Suppose the savings rate is 25%.Is this economy is it's steady state? Explain.
d.
What savings rate is necessary for the economy to be in a steady state? What is consumption per worker, c in the steady state?
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Using Excel For Principles Of Econometrics
Authors: R Carter Hill, Genevieve Briand
4th Edition
1118032101, 9781118032107
