Question
Consider the Basic Solow Model without exogenous growth: Y = AK^L^( 1 ) C = (1-s)Y C =(1 s ) Y Y = C +
Consider the Basic Solow Model without exogenous growth:
Y=AK^L^(1)
C = (1-s)Y
C=(1s)Y
Y=C+I
K=I+(1)K
where labor L is constant. Assume the following values for the rest of this question:
A=1000
=0.33
s=0.12
=0.09
L=25
Suppose that initially, total capital (not per worker) is
K0=1000
question is:
Compute capital per worker in the initial year.
Compute output per worker in the initial year.
Compute capital per worker in one year (i.e., compute k'). please by hand or use a spreadsheet or other numerical tool.
Compute output per worker in one year (i.e., compute y'). please by hand or use a spreadsheet or other numerical tool.
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