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{I} Y: K E GEL) = where A is positive , u is a parameter between zero and one, K is capital and L the

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{I} Y: K E GEL)\" = where A is positive , u is a parameter between zero and one, K is capital and L the number of workers or labor force (equal to population} Assume that labor (or population} grows at a positive rate In, that A grows at a positive rate g, that physical capital depreciates at a rate 5 {between zero and one) and that the savings rate s is a constant between zero and one. Physical capital is then accumulated according to: {2) l==sY an and consumption is: C ={ls} Y. {I} Derive the you-th rates of output (Y) and capital (K) at the EGP. To solve the model it is convenient to divide (l) by AL, so that we work with variables per e'ective number of workers: (YE A. L}, {K :' A L}, and similarly. {2) Write down the per e'ective unit of labor production function and the lat.r of motion of the capital per e'ective unit of labor

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