Exercise 3.3. For the Cobb-Douglas production function from Example 3.1 Y (t) = A (t) K (t)

Question:

Exercise 3.3. For the Cobb-Douglas production function from Example 3.1 Y (t) = A (t) K (t) a L(t) 1−α, derive an exact analog of (3.8) and show how the rate of convergence, i.e., the coefficient in front of (log y (t) − log y∗ (t)), changes as a function of log y (t).

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