-0.02
0.00
0.02
0.04
0.06
0.08
0.10
0
1
2
3
4
5
6
7
Growth rates
\text{Growth rates}
Growth rates
K/AL ratio
\text{K/AL ratio}
K/AL ratio
(
K
/
A
L
)
s
s
(K/AL)_{ss}
(
K
/
A
L
)
s
s
Initial
K
/
A
L
\text{Initial } K/AL
Initial
K
/
A
L
g
K
g_K
g
K
K
/
A
L
moves
K/AL \text{ moves}
K
/
A
L
moves
g
K
=
s
K
(
A
L
K
)
1
−
α
−
δ
g_K = s_K \left(\frac{AL}{K}\right)^{1-\alpha} - \delta
g
K
=
s
K
(
K
A
L
)
1
−
α
−
δ
g
A
+
g
L
g_A + g_L
g
A
+
g
L
INITIAL CONDITIONS
You can adjust the initial K/AL ratio using the dot on the x-axis or this control
K
/
A
L
=
K/AL =
K
/
A
L
=
PARAMETERS
Adjust these to see how steady state and the growth rate of capital change
g
L
=
g_L =
g
L
=
g
A
=
g_A =
g
A
=
s
K
=
s_K =
s
K
=
δ
=
\delta =
δ
=
α
=
\alpha =
α
=
CALCULATIONS
Given the initial conditions and parameters we can calculate these...
(
K
/
A
L
)
s
s
=
3.70
(K/AL)_{ss} = 3.70
(
K
/
A
L
)
s
s
=
3
.
7
0
(
K
/
Y
)
s
s
=
2.50
(K/Y)_{ss} = 2.50
(
K
/
Y
)
s
s
=
2
.
5
0
g
K
=
s
K
(
A
L
/
K
)
1
−
α
−
δ
=
0.0731
g_K = s_K (AL/K)^{1-\alpha} - \delta = 0.0731
g
K
=
s
K
(
A
L
/
K
)
1
−
α
−
δ
=
0
.
0
7
3
1
g
y
=
α
(
g
K
−
g
A
−
g
L
)
+
g
A
=
0.0329
g_y = \alpha (g_K - g_A - g_L) + g_A = 0.0329
g
y
=
α
(
g
K
−
g
A
−
g
L
)
+
g
A
=
0
.
0
3
2
9