Question

Suppose that we have a standard Solow model with a Cobb-Douglas production function. The central equation of the model is as follows: kt+1 = sAkα t + (1 − δ)kt . Consumption per worker is given by: ct = (1 − s)Akα t . (a) Solve for an expression for the steady state capital stock per worker. In doing so, assume that the level of productivity is fixed at some value A.

Answer 1

The answer is shown in the attachment

Explanation:

The detailed step by step and appropriate mathematical manipulation for the expression for the steady state capital stock per worker is as shown in the attachment.