Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello, please explain how to get the formula i have highlighted , thanks ! ._._ '- Production per eective worker is a function of the

Hello, please explain how to get the formula i have highlighted , thanks !

image text in transcribed
._._ '- Production per eective worker is a function of the capital stock per e'ecve worker. With constant returns to scale, the size of the economy does not mat- ter. Countries with the same technology 3 and the same capital per worker K [N will have the same GDP per worker independent of their size. This seems reason- able. at least as a rough approximation.' To simplify notation, we use lower case I: to denote the capital stock per worker: K k= EN and we also use the simplied notation X f\"? =F(EJV' I) . Note that f ' (k) is the marginal product of capital We see that the marginal product of capital depends on how much capital there is per effective worker. With this notation, the steady state capital stock per effective worker. 16. is determined by the following condition

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Levelling What's Next After Globalization

Authors: Michael O'Sullivan

1st Edition

1541724089, 9781541724082

More Books

Students also viewed these Economics questions

Question

Describe the importance of employer branding.

Answered: 1 week ago

Question

Explain corporate sustainability.

Answered: 1 week ago