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Please explain how the equation i have derived please try with even some effort!!!! stock depreciates and has to be replaced. Also, in order to

Please explain how the equation i have derived please try with even some effort!!!!

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stock depreciates and has to be replaced. Also, in order to keep the capital stock per effective worker constant we have to make investments so that the capital stock grows at the rate g + n. Therefore, maintaining a very high capital stock will be costly in terms of consumption. There is some level of capital that max- imizes consumption in steady state. To find this level of capital, note that on a steady state growth path, the capital stock grows at the rate g + n, so the necessary investment is AK 1 = AK +8K = K K+SK=(n+g) K+8K=(n+g+8)K. Therefore, consumption per effective worker is Y f (k) - ( n+8+8)k

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