Question
In the Solow model, if the per worker production function of Japan is given as Y/N = 2K/N 0.5 , the depreciation rate as 20%,
In the Solow model, if the per worker production function of Japan is given as Y/N = 2K/N0.5, the depreciation rate as 20%, the population growth rate as 5% and the savings rate as 5%, and the savings function is given as S = 0.25Y :
1. Calculate the steady-state capital labour ratio (K/N)
2. What is the steady-state output per worker (Y/N)?
3. Since the early 1990's, Japan's population growth rate has declined to only 2% and savings rates have increased to 27%. indicate the impact of these changes on capital per worker and output per worker graphically
I have attempted to answering these questions but I think I am going wrong somewhere, I would like a brief calculation of all the steps please.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started