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Problem 4 Consider the following production function: Y, = AK-, where Keis capital, Huis human capitalLuis the amount of workers and A is the constant)
Problem 4 Consider the following production function: Y, = AK-, where Keis capital, Huis human capitalLuis the amount of workers and A is the constant) level of technology Imagine that the number of people in this economy, N, is different from the number of workers because some people do not work. Let le = be the number of workers per capita (the fraction of the population that works). Let y = * be output per capita and k = be capital per capita. Finally, let n be the rate of population growth and Y, be the growth rate of labor. (ii) Using the "effective production function you derived in (b), write down output per capita, ye, as a function of capital per capita, kt, labor per capita, lthe level of population N., and the level of technology, A. Following Solow and Swan, assume there is no government and no net exports, that the depreciation rate of capital is the constant 8 >0 and the savings rate is constant 0
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