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Solow Growth Model Assignments

The document contains instructions from a professor assigning homework on the Solow growth model to be completed by students. It includes 3 assignments with point values totaling 30 points. Students are instructed to submit their answers by the following Wednesday so the professor can grade the assignments and discuss solutions and common mistakes in class on Thursday.

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Taruna Bajaj
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188 views1 page

Solow Growth Model Assignments

The document contains instructions from a professor assigning homework on the Solow growth model to be completed by students. It includes 3 assignments with point values totaling 30 points. Students are instructed to submit their answers by the following Wednesday so the professor can grade the assignments and discuss solutions and common mistakes in class on Thursday.

Uploaded by

Taruna Bajaj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CC9 – Unit 3 – Solow Growth Model – DS class on 28.4.

2020 Tuesday

Assignments on Solow Growth Model

Full Marks: 30

Instructions:

Dear All,

You must submit your answers to the assignments by 29.4.2020 Wednesday, so that I can
grade them and put up the solutions and discuss the common mistakes in my class on
30.4.2020 Thursday.

Thanks
DS Mam.

Assignment 1:

Consider the production function 𝑌 = 𝐾 0.2 𝐿0.8 , where K is capital stock and L is labour force.
Derive the values of the golden rule k and s, where δ=0 and n=0.1. Explain your result. What
is the value of C* when K*=0.5? At what value will the steady occur at K*=0.2?

2+2+2+2+2=10

Assignment 2:

Suppose an economy described by the Solow Model is in a steady state with population
growth, n, of 1.0 per cent per year and technological progress of 2.0 per cent per year. Total
Output and total Capital grow at 3.0 per cent per year. Suppose further that the capital share
of output is 0.3. If you used growth account equation to divide output growth into three
sources – capital, labour and total factor productivity – how much would you attribute to each
source?

3+3+4=10

Assignment 3

“In the Neo-Classical Growth Model an increase in savings rate does not affect the growth
rate or the capital-labour ratio.” Is it true or false? Explain. 10

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