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Consider the Basic Solow Model with exogenous growth: Y = AK^ ( EL )^(1 ) C =(1 s ) Y Y = C + I
Consider the Basic Solow Model with exogenous growth:
Y=AK^(EL)^(1)
C=(1s)Y
Y=C+I
K=I+(1)K
L=(1+n)L
E=(1+g)E
Assume the following values for the rest of this question:
A=100
=0.35
s=0.15
=0.05
n=0.02
g=0.03
- Compute steady state capital per effective worker.
- Compute steady state output per effective worker.
- Compute steady state consumption per effective worker.
- Compute steady state investment per effective worker.
- In the steady state, what is the growth rate of output per worker (Y/L)?
- In the steady state, what is the growth rate of aggregate output (Y)?
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