Consider an economy with production function

Y = K^α*T^β*(AL)^1−α−β

where K, A, L are, as usual, capital, technological progress and labour and T is the stock of land. α, β > 0. A grows at rate g and L grows at rate n. The stock of land is ﬁxed though. Aggregate saving equals a fraction s of aggregate output. Assuming K depreciates at rate δ

Derive the steady state growth rate of capital

a) K./K = (1-α-β)(g+n)/(1-β)

b) K./K = (1-α-β)(n)/(1-β)

c) K./K = (1-α-β)(g+n)/(1-α)

d) None of these

Derive the condition when steady state growth rate of output per worker is positive.

a) (1-α-β)g > βn

b) (1-α-β)g < βn

c) (1-α-β)g = βn

d) None of these

PLz help...

M.A Economics

Delhi School of Economics

2013-15

Email Id:sumit.sharmagi@gmail.com