Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 9, Problem 2PA
(a)
To determine
The rate at which the total output, output per worker and output per effective worker grow.
(b)
To determine
The capital per effective worker, output per effective worker and the marginal product of capital.
(c)
To determine
The saving rate at the Golden rule steady state.
(d)
To determine
The growth rate of output at the Golden rule steady state.
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Suppose that an economy has the following
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%3D
Consider an economy described by the production function Y=F(K,L)=K^(0.5) L^(0.5).
1. Does this production function have constant returns to scale?
2. What is the per-worker production function, y=f(k)?
3. Assuming no population growth or technological progress, the economy saving rate is 30%,
capital depreciation rate is 10%, what are the steady state k, y, c?
4. Now we assume population growth at 5%, and still no technological progress, the economy
saving rate is 30%, capital depreciation rate is 10%, what are the steady state k, y, c now?
5. Now we consider technological progress in this production function so we have
Y=F(K,LE)=K^(0.5) (LE)^(0.5). Technological progress increases at 5% per year, still we assume
population growth at 5%, the economy saving rate is 30%, capital depreciation rate is 10%, what
are the steady state k, y, c now?
6. Based on the steady state in question 5, at what rates do total output, output per worker, and
output per effective worker grow?
7. Based on…
Consider an economy described by the production function Y=F(K, L)=?^0.4?^0.6
A) What is the per-worker production function?B) Assuming no population growth or technological progress, find the steady-state capital stock per worker, output per worker, and consumption per worker as a function of the saving rate and the depreciation rate.
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