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Consider an economy with a production function YtK1t1uLt.pdf

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Consider an economy with a production function Yt=K1t[(1u)Lt] , where Kt is capital, Lt is the labour force, and u is the natural unemployment rate. The labour force grows at a rate n>0 , capital depreciates at a rate >0 , and the national savings rate is s(0,1) . Derive steady-state per capita consumption in terms of u , s , , n and ..

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Consider an economy with a production function Yt=K1t[(1u)Lt] , where Kt is capital, Lt is the labour force, and u is the natural unemployment rate. The labour force grows at a rate n>0 , capital depreciates at a rate >0 , and the national savings rate is s(0,1) . Derive steady-state per capita consumption in terms of u , s , , n and .

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Consider an economy with a production function YtK1t1uLt.pdf

  • 1. Consider an economy with a production function Yt=K1t[(1u)Lt] , where Kt is capital, Lt is the labour force, and u is the natural unemployment rate. The labour force grows at a rate n>0 , capital depreciates at a rate >0 , and the national savings rate is s(0,1) . Derive steady-state per capita consumption in terms of u , s , , n and .