In: Economics
Assume that the per-worker production function is yt = 5∙kt1/2. Further, assume that the saving rate, s = 0.2, the depreciation rate, ?=0.04, and the population growth rate, n= 0. Calculate the following:
The steady-state values of the capital-labor ratio, k* , output per worker, y*, investment and saving per worker, i* and s*, and , and consumption, c*.
Given the above details we know that at Steady state,
Following the above formulas we will find the value for k*, y*, c*, s* and i*
Therefore,