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An economy has the following parameter values: s ?=.3,d ?=.1,A ?=1,andL ?=100.2 The economy begins at steady state but at some point is attacked by Godzilla, destroying 70% of the capital stock. Calculate the growth of per-capita GDP in the period immediately following the Godzilla attack.
1 The Drop box will not close but your score will be reduced by the amount described in the syllabus depending on how late it is uploaded.
2 Note that the presence of savings and depreciation rates mean that this problem involves the Solow model.
Rewrite the national-income model (3.23) in the format of (4.1), with Y as the first vari¬able. Write out the coefficient matrix and the constant vector.
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