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Solow Growth Model: President Joe Biden has placed an emphasis on investing in children and future generations. We will see how this might affect outcomes
Solow Growth Model: President Joe Biden has placed an emphasis on investing in children and future generations. We will see how this might affect outcomes in the very long run. Consider an economy, that is described by the Solow Growth Model, where
YtS = AtKt2/3Lt1/3
YtD = Ct + It
ct = (1-s)yt
it = syt
kt+1 = kt - + it
Assume At = 3. s = 0.25, = 0.05 and current per capita stock of capital (k0) is 2000.
How do I solve for the steady state of per capita capital (k*), GDP (y*), consumption (c*), and investment (i*)?
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