Growth rates in the solow model

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Growth rates in the Solow model (I):

(a) Use the production function in equation (5.6) and the rules for computing growth rates from page 51 of Chapter 3 to write the growth rate of per capita GDP as a function of the growth rate of the capital stock. (Hint: Because the labor force is constant, the growth rates of GDP and per capita GDP are the same.)

(b) Combine this result with the last equation in footnote 7 (Section 5.9) to get a solution for the growth rate of per capita GDP as a function of the current level of capital Kt . Be sure to write your answer in terms of Kt and parameters of the model only. For example, use the fact that sY */K * = d.

Reference no: EM131004742

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