00:01
First in the solo growth model and increase in the rate of capital depreciation will have the following effects.
00:33
First is steady state capital steady state capital per worker.
00:54
Higher depreciation rate means that capital is wearing out more quickly and so the economy needs to invest more just to maintain the same level of capital per worker.
01:14
As a result the steady state capital worker will decrease.
01:17
Second is the steady state output per worker.
01:36
Since output per worker is a function of capital per worker, a decrease in steady rate steady state capital per worker will lead to a decrease in steady state output per worker.
01:49
Third is the steady state consumption per worker.
02:03
Consumption per worker is the difference between output per worker and investment per worker.
02:11
Since output per worker decreases and investment per worker increases, steady state consumption per worker will decrease.
02:21
And fourth is long run growth rate of the total capital stock...