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An economy has the per-worker production function yt=f(kt)=4kt)0.4, where yt is the output per worker and kt is the capital-labor ratio. The depreciation rate is 0.15, and the population growth rate is 0.04. Saving is St=0.5Yt, where St is total national saving and Yt is total output. The slope of the per worker production function is given by f' (kt)=1.6kt-0.6 . What is the steady state value of capital-labor ratio, k*? Round your answer to at least 2 decimal places.

An economy has the per-worker production function yt=f(kt)=4kt)0.4, where yt is the output per worker and kt is the capital-labor ratio. The depreciation rate is 0.15, and the population growth rate is 0.04. Saving is St=0.5Yt, where St is total national saving and Yt is total output. The slope of the per worker production function is given by f' (kt)=1.6kt-0.6 . What is the steady state value of capital-labor ratio, k*? Round your answer to at least 2 decimal places.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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An economy has the per-worker production function yt=f(kt)=4kt)0.4,

where yt is the output per worker and kt is the capital-labor ratio. The depreciation rate is 0.15, and the population growth rate is 0.04.

Saving is St=0.5Yt,

where St is total national saving and Yt is total output.

The slope of the per worker production function is given by

f' (kt)=1.6kt-0.6 .

What is the steady state value of capital-labor ratio, k*? Round your answer to at least 2 decimal places.

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