Consider a numerical example using the Solow growth model. Suppose that F(K, N) = ZK K0.30 N0.70 , with d= 0.06, s = 0.10, n=0.02, and z= 1, and take a period to be a year. The steady-state level of income per capita is (Round to two decimal places as needed.) The steady-state level of consumption per capita is The golden rule level of capital per capita is (Round to two decimal places as needed.) (Round to two decimal places as needed.)

THE COLLAPSE OF THE GROWTH TIGERS Following in the footsteps of Japan, many other east Asian countries followed suit and generated unprecedented growth rates that averaged about 10% per year Hong Kong and Taiwan were first, followed by South Korea and Singapore. More recently, Thailand, Malaysia, and Indonesia posted growth rates of close to 10%. All of these countries maintained these superheated growth rates for at least two decades. Thus it came as a major shock to economists and investors around the world when the Thai baht uncoupled from the dollar and devalued in July 1997. The Malaysian ringgit, Indonesian rupiah, and the South Korean won quickly followed suit, with all of these currencies falling more than 50% relative to the dollar during late 1997 and early 1998. The currencies of Singapore, Hong Kong, and Taiwan also came under pressure but were not devalued. Not only did the superheated growth rates of the growth tigers suddenly come to a halt, but these countries plunged…

Consider the Solow Growth Model studied in Chapter 5 with the following information: The production function is: Y₁ = AK₁¹/³L2/3 Amount of labor (Lt) = 1000 Investment rate (s) = 0.1 Depreciation rate (d) = 0.4 Productivity (A) = 1 Find the numerical value of the steady-state level of output per person.

An economy described by the Solow growth model has the following production function: y = Vk A. Solve for the steady-state value of y as a function of s, n, g, and d. B. A developed country has a saving rate of 28 percent and a population growth rate of 1 percent per year. A less developed country has a saving rate of 10 percent and a population growth rate of 4 percent per year. In both countries, g = 0.02 and d= 0.04. Find the steady- state value of y for each country. C. What policies might the less developed country pursue to raise its level of income?