Question

The People's Republic of China has historically had a savings rate of around 30%. In recent the savings rate has started to decline and some policymakers are concerned. Suppose that China's production function is f left parenthesis k right parenthesis equals k to the power of 1 divided by 3 end exponent which means f apostrophe left parenthesis k right parenthesis equals 1 third k to the power of negative 2 divided by 3 end exponent. If its TFP is A=9.7, depreciation rate is 0.2, and population growth rate is 0.06 then what is the golden rule capital-labor ratio?

Answer 1

1=AK Golden rule Condition 9-+х) - - - 0.26 3 4. = 3х6 2.6 хк 9+ = 0.18. Кs Ing- К - 18 - 12:43 К 1K2 Т. 3, 7 This capital-Carbour kalio,