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10 Cards in this Set
- Front
- Back
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Population growth
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consumption in each period
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Constant returns to scale implies:
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Quantity of consumption per worker
(standard of living) |
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When k’=k, we reach the steady state (SS).
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In SS, k’=k=k*. So we have
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In SS, the consumption per worker is
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c=(1-s)zf(k*)=zf(k*)-(n+d)k*
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The golden rule quantity of capital per worker k*gr is k such that c is maximized
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MPk=n+d
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Production technology
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When N’=N, we say the economy
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When N’=N, we say the economy reaches the steady state (SS).
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