Suppose that total factor productivity, A,, fluctuates in the Solow model. In particular: A₁ = A=1 if t = 0,3,6,... A₁ A1 ift-1,4,7,... A₁ = AL < 1 if t = 2,5,8,... Also suppose that the saving and depreciation rate are some positive constants s and 6, re- spectively, and that population and labor force remain constant over time. Finally, the aggregate production function is given by: Y₁ = A₁ KoN- a) Solve for GDP per worker, y=Y₁/N₁. Like we did in last class, show in a dynamic diagram how the economy will experience fluctuations in real income, i.e., "business cycles". What do these artificial cycles look like and in what ways do they resemble real macroeconomic

Suppose that total factor productivity, A,, fluctuates in the Solow model. In particular: A₁ = A=1 if t = 0,3,6,... A₁ A1 ift-1,4,7,... A₁ = AL < 1 if t = 2,5,8,... Also suppose that the saving and depreciation rate are some positive constants s and 6, re- spectively, and that population and labor force remain constant over time. Finally, the aggregate production function is given by: Y₁ = A₁ KoN- a) Solve for GDP per worker, y=Y₁/N₁. Like we did in last class, show in a dynamic diagram how the economy will experience fluctuations in real income, i.e., "business cycles". What do these artificial cycles look like and in what ways do they resemble real macroeconomic

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 1.3CE: Logarithms are especially useful for comparing series with two divergent scales since 10 percent...

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Assume the per-worker production function is y = 2k05 The saving and depreciation rates are 0.2 and 0.04 respectively. Calculate the value for output per worker (y) at the steady state, assuming no population growth. Answer:
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