Find the golden rule quantity of capital per worker

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Reference no: EM13997464

Consider a numerical example using the Solow growth model, suppose that F(K,N)=K^0.5N^0.5 with d=0.1,s=0.2,n=0.01,and z=1, and take period to be a year.

a) Determine capital per worker, income per capita, and consumption per capita in the steady state.

b) Find the golden rule quantity of capital per worker. Is there overinvestment or underinvestment in this economy, relative to golden rule?

Reference no: EM13997464

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