If the per-worker production function is given by y = k1/2, the saving rate (s) is 0.3, and the depreciation rate is 0.1, What is the steady-state per-worker capital k* ?
Added by Heather C.
Step 1
Step 1: The steady-state per-worker capital (k*) can be found using the formula: k* = (s / (n + δ))^(1 / (1 - α)), where s is the saving rate, n is the population growth rate, δ is the depreciation rate, and α is the output elasticity of capital. Show more…
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