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Consider the Solow Growth Model with the production function: F(K, N) = zK0.3N 0.7 . Assume the capital depreciates at a rate d = 0.10,
Consider the Solow Growth Model with the production function: F(K, N) = zK0.3N 0.7 .
Assume the capital depreciates at a rate d = 0.10, the population grows at a rate n = 0.01, and the total factor productivity is z = 1. Suppose the unit period is one year.
- Give the expression of the per-capita production function.
- What is the golden rule level of capital k ?
- Calculate the golden rule saving rate s .
4. Find the highest level of consumption per capital c .
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