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Homework answers / question archive / An economy has the per-worker production function y = k 1/3 where y is output per worker and k is capital per worker

An economy has the per-worker production function y = k 1/3 where y is output per worker and k is capital per worker. Capital accumulation follows: ?k = sy − (n + δ)k The saving rate s is 0.2, the depreciation rate δ is 0.04, and the population growth rate n is 0.01.

e. Suppose the economy is not in the steady state. Derive the growth rate of capital per worker ( k? k ) along the transition path as a function of k, s, n and δ. Under what condition is k? k positive? What is the relationship between k? k and k?

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