ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Consider the Production Function: Y=0.5√K√N
a) Derive the steady-state levels of output per worker and
capital per worker in terms of the saving rate (s) and the
b) Derive the equation for steady-state output per worker and
steady-state consumption per worker in terms of the saving
rate (s) and the depreciation rate.
c) Suppose depreciation is 5% and savings rate is 10%.
Calculate the steady-state output per worker.
d) Now suppose the savings rate increases to 20%. What is the
new steady-state output per worker?
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