**Author:** s121...@sms.ed.ac.uk

Hi

I hope this is the right place to ask this maybe a little stupid question.

In the quantecon notes on the Aiyagari model I do not see how equation 3.31 is derived

(3.31) w® = A * (1-alpha) * (alpha/(1+r))**(alpha/(1-alpha))

No matter how I twist the algebra I arrive at

w® = A * (1-alpha) * ((A*alpha)/r)**(alpha/(1-alpha))

This is how I get there. From 3.30

(3.30) r = A *alpha * (N/K)**(1-alpha)

I solve for K/N as a function of r

(2) (1) K/N = ((A*alpha)/r)**(1/(1-alpha))

I substitute (1) into my FOC for wages, which is

(2) w = A * (1-alpha) * (K/N)**alpha

To get

(3) w® = A * (1-alpha) * ((A*alpha)/r)**(alpha/(1-alpha))

Could somebody please help me find where I go off track.

Thank you!