In the chart I attached there are 20 columns and 7 rows.
The calculations are as follows:
K in first period - 8 (given)
product per worker (y) - 2*K^(1/3) = 4
Total invesment - s*y - s (savings rate) is given as 0.1 and y was calculated in the previous line. s*y = 0.1*4 = 0.4
Depreciation on capital - deperciation rate is set at 2.5% (0.0025) so the depreciation is 0.0025*k = 0.0025*8 = 0.2
Net investment = Total investment (0.4) - Depreciation (0.2) = 0.2
Consumption per worker = product per worker (4) - Net investment (0.4) = 3.6
Growtn in product per worker - Can only start calculating from next period. It is (yt-yt-1)/yt-1. (Next year's product per worker minus this year's product per worker, the answer is divided by last year's product per worker).
How do I make excel do these calculations? Thank you.
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