solow growth model doubt

[anon_econ]

Two countries, Richland and Poorland, are described by the Solow growth model. They have the same Cobb-Douglas production, F (K, L) = A K^α L^1-α, but with different quantities of capital and labor, Richland saves 32% of its income, while Poorland saves 10%. Richland has population growth of 1% a year, while Poorland has population growth of 3% per year. Both nations have technological progress rate of 2% per year and depreciation rate of 5% per year.

a. What is the per-worker production function f (k)?

b. Solve for the ratio of Richland's steady-state income per-worker to Poorland's. Hint: The parameter α will play a role in your answer.


My main problem is that we have to find the steady state level of income PER WORKER (rather than per efficiency unit of labour) 4 each of the countries, but there is technological progress at the rate of 2%. Is the technological progress labour augmenting? If yes, how can we find the steady state level of income per worker? And if not, then will we have sy=(δ+n+g)k, or only sy=(δ+n)k???

[Chocolate Frog]

Sorry to pull out an old thread like that, but I had a similar doubt some time back which remained unaddressed. I don't think technology is labour augmenting because then the parameter of technological progress would have entered the production function differently. So, the effective labour force doesn't change as a result of technological progress; investment requirement cannot be (n+d+g)k. Having said that, technological progress does make production more efficient. Thus for a given rate of change of population and depreciation rate, shouldn't investment requirement be less in the presence of technological progress than without it?

Anyway, taking sy = (n+d)k, I'm getting (0.234)^(α/α-1) as the answer. Can anyone confirm?