Answer Happy

In the Solow - Diamond model the dynamics of the economy is characterized by the following equation: kul = A(1 - a)ko 1 + 1 + whore k = ls per capita capital stock at datot. K, is the aggregate capital stock. L, is the size of the population and grow at the rate of n, L+1 = (1 + n)L. B is the discount factor. 1, is the saving rate, A is the productivity of the economy, 1 - als labor share, and a is capital share. The steady-state per capita consumption is written as C = Ak" - (+5) where c is the steady-state per capita consumption. A is the productivity level, k is the per capita capital stock, 6 is the doprolition rate of capital, and in the population growth rate. Uso P=0.8. A = 18.9,1 = 0.05, 6= 0.1 Compute the growth rate of the aggregate capital stock, K-K K in steady state where K, is the stock of capital of time and Kis is the stock of capital at time 1+1