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Consider the Solow model with perpetual population growth at rate n , and the production function is T t = A t K t 0.03
Consider the Solow model with perpetual population growth at rate n, and the production function is Tt = AtKt0.03Lt0.7 where Kt is the total capital stock and Lt is the number of workers. Assume that the employment-population ratio is constant.
"With constant TFP (At=A), the capital-worker ratio Kt/Lt grows at the rate of population n."
Is the above statement true or false? Explain your response.
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