I'm taking an macro-econ paper and I can't seem to work out the following simplification. Basically somehow by combining equation 4.14
and 4.15
we get 4.16
.
$y_{t-1}$ denotes the previous year's output per capita, so $ln(y_{t-1})$ should be $a*ln(k_{t-1}) + ln(A)$, can't seem to explain the process even though I know the solution!
Equation 4.14
$ ln(k_{t+1}) = b + a*ln(k_t) + ln(A_t) $
Equation 4.15
$ ln(y_t) = a*ln(k_t) + ln(A_t) $
Equation 4.16
$ ln(y_t) = ab + a*ln(y_{t-1}) + ln(A) $