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Derive the law of motion for the capital stock. Show that it satisfies = , where is a constant that depends only on exogenous parameters.
Derive the law of motion for the capital stock. Show that it satisfies = , where is a constant that depends only on exogenous parameters.
Given:
Y = AKG1
K = (1)sYK
G = Y
Resolved:
K = (1)sYK
K = (1)sAKG1K
K = (1)sAKY1K
K = sAK(1)Y1K
K = sAK(1-)A1K1G(1)(1)
K = K(1)K
Can anyone help me check my answer for this question? Many thanks!
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