Search for question
Question

Consider the Solow model. A firm produces output according to Cobb-Douglas pro-

duction structure Y₁ = K (ZN)¹-a, where K, is physical capital stock, and ZtNt is

units of effective worker. Labor Nt grows at a rate of 9n and efficiency of labor Zt

grows at a rate gz. The household consumes a fixed fraction of its income each period,

equal to (1-s).

Fig: 1