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Consider a Solow-type growth model with the following production function as well as the other necessary information. 1/3 2/3 Y = K H with H
Consider a Solow-type growth model with the following production function as well as the other necessary information. 1/3 2/3 Y = K H with H = E*L and E = 2 is the level of skill or education and g is its growth rate; s is the saving rate; n is the labor growth rate, and o is the depreciation rate. a. Write the production function in per unit of human capital (H) terms. b. Determine the steady-state (long run equilibrium) value of output per unit of human capital. C. At the steady state, how fast does output per labor grow in this model? (Explain why.) d. If s= .1, n=.01, g=.02, and 5=.05, what would be the steady state values for output per unit of human capital and output per unit of labor? e. If the depreciation rate were to double from the level indicated in part d, what would be the impact on output per unit of human capital? On output per labor? f. What is the golden rule level of capital per human capital and the corresponding consumption per human capital? Paragraph B I a V=K^1/3(E*L)2/3 = K^1/3*2L^2/3
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