Macroeconomics 12th Edition by Rudiger Dornbusch, Stanley Fischer ,Richard Startz

تمرين 18

Consider an economy in which production is characterized by the neoclassical function Y = K.5 N.5. Suppose, again, that it has a saving rate of.1, a population growth rate of.02, and an average depreciation rate of.03.
a. Write this production function in per capita form, and find the steady-state values of k and y.
b. At the steady-state value of k , is there more or less capital than at the golden-rule level
c. Determine what saving rate would yield the golden-rule level of capital in this model.
d. In the context of this neoclassical growth model, can a country have too much saving