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    production function

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    Suppose an economy's production function is Y = K1/2 x [AN]1/2 and that the savings rate, s, is equal to 20%, the depreciation rate, δ, is equal to 8%, the number of workers grows at 1.5% and the rate of technological progress is 5% per year, then find the steady-state values of 1) capital stock per effective worker, 2) output per effective worker, 3) the growth rate of output per effective worker, 4) the growth rate of output per worker, and 5) the growth rate of output.

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    Solution Summary

    The production function is assessed. Capital stock per effective worker-output is assessed.