According to Solow growth model, which are the main factors leading to expect convergence across regions. In addition, discuss which factors, if any, may lead to expect no convergence. b) In 2010, GDP per capita of the region of Brussels (Belgium) was €55000, while that of Severozapaden (Bulgaria) was €6.500. Assume that, from 2010 onwards Brussels maintains a constant anual growth of 2% during 50 years.. Obtain the (constant) annual growth rate at which the region of Severozapaden should grow in order to attain the same GDP per capita of Brussels after this period (50 years). Hint: use instantaneous annual growth rates. c) Discuss the implications of your answers in sections a) and b) for EU's regional policy.

According to Solow growth model, which are the main factors leading to expect convergence across regions. In addition, discuss which factors, if any, may lead to expect no convergence. b) In 2010, GDP per capita of the region of Brussels (Belgium) was €55000, while that of Severozapaden (Bulgaria) was €6.500. Assume that, from 2010 onwards Brussels maintains a constant anual growth of 2% during 50 years.. Obtain the (constant) annual growth rate at which the region of Severozapaden should grow in order to attain the same GDP per capita of Brussels after this period (50 years). Hint: use instantaneous annual growth rates. c) Discuss the implications of your answers in sections a) and b) for EU's regional policy.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

According to Solow growth model, which are the main factors leading to expect convergence across
regions. In addition, discuss which factors, if any, may lead to expect no convergence. b) In 2010, GDP
per capita of the region of Brussels (Belgium) was €55000, while that of Severozapaden (Bulgaria) was
€6.500. Assume that, from 2010 onwards Brussels maintains a constant anual growth of 2% during 50
years. • Obtain the (constant) annual growth rate at which the region of Severozapaden should grow in
order to attain the same GDP per capita of Brussels after this period (50 years). Hint: use instantaneous
annual growth rates. c) Discuss the implications of your answers in sections a) and b) for EU's regional
policy.

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Step 1: Define growth model

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Step 2: State main factors leading to convergence and no convergence

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Step 3: Calculate constant growth rate for Severozapaden

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Step 4: State implication for EU regional policy

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