Answer to Question #294441 in Macroeconomics for Bunny

Question

Consider following information from the Solow model in a continuous time, 𝒚 = 𝟐𝒌

𝟐 − 𝟒𝒌,

𝒌̇ = 𝒔𝒇(𝒌) − (𝒈 + 𝒏 + 𝜹)𝒌, 𝒚 = 𝒄 + 𝒊, where 𝒌 =

𝑲

𝑨𝑳

, g-is growth of technology, n-is labor force

growth rate, and 𝜹- is rate of depreciation. Answer the following questions-

(i) What are the assumptions this production function violates? (1 Mark)

(ii) Find out the steady state and golden rule solution of 𝑘

∗

, 𝑦

∗

, 𝑐

∗

? (2 Marks)

(iii) Find out the steady state and golden rule solution of per capita capital, output ratio and

consumption?

Answer 1

It's been a while since this question is posted here. Still, the answer hasn't been got. Consider converting this question to a fully qualified assignment, and we will try to assist. Please click the link below to proceed: Submit order