High School

Can you derive the capital per worker, output per worker, and consumption per worker in the steady state?

Answer :

The capital per worker, output per worker, consumption per worker in the steady state is to be more precise, k* = k*(1 ) + sAf(k*) is the solution to the equation for the steady state level of capital.

When output, consumption, and capital per worker remain constant, this is referred to as the steady state. An economy eventually stabilises in the absence of productivity growth, with production increasing at the pace of population growth. Since capital per worker is constant in the steady state, so is output.

Consequently, the steady-state output growth rate per worker is 0. The amount of capital per employee is: In all other respects, an economy with more physical capital is able to generate more than one with less. More capital investment boosts economic growth because it increases the pool of available capital due to savings and investment.

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