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2. Consider a simplified version of the Solow model discussed in class with no depreciation of the capital stock (i.e. o = 0). Assume that the production function is given by: Y (t) = A (t) F (K (t) , L (t) ) Since this specification implies that A (t) affects both capital and la- bor symmetrically, this case is typically referred to as one of "neutral technological change" as opposed to the case of "labor-augmenting technological change" considered in class. Furthermore, assume that function F (.) is Cobb-Douglas: F (K, L) = Ka-a, where 0 0. These random variables have mean E(X (i) Show that the log-likelihood function is and hence or otherwise, find the MLE ford. (7 marks] (ii) Derive the method of moments estimator for d.Consider a version of the Solow growth model in which output at time t is determined by the production function Y, = 0.2K, + 0.8L. . The depreciation is given by dK. , where the depreciation rate is d = 0.2. Saving is given by sY, where the saving rate is s = 0.5. Assume that population L t is constant, i.e. does not grow with time. Calculate the steady-state capital per person, ks. Also, calculate the steady-state output per person and consumption per person, y" and c's, respectively