Question
Equation Kt+1=sYt+ (1)Kt Lt+1/Lt= (1 +n) Hi! i have two questions about it. Can you help me to solve it? the first question is when
Equation Kt+1=sYt+ (1)Kt
Lt+1/Lt= (1 +n)
Hi! i have two questions about it. Can you help me to solve it?
the first question is when I divide the equation 1 by Lt and use equation 2 to express the capital accumulation equation in per worker variables eg. yt=Yt/Lt
Note that Lt+1/Lt+1= 1 and pay careful attention to the time subscripts.
the second question is to substitute in the production function into your answer for the first question I ask and calculate the steady-state for capital per worker. How does capital depend on(1 +n) on the balanced growth path?
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