Alter the Solow growth model so that the pro- duction technology is given by Y = zK, where Y is output, K is capital, and z is total factor pro- ductivity. Thus, output is produced only with capital. (a) Show that it is possible for income per person to grow indefinitely. (b) Als show +hat incre in the covings
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- What do the growth accounting studies conclude are the determinants of growth? Which is more important, the determinants or how they am combined?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.In the Solow growth model, which of the following is/are the effect/s of an increase in the rate of technological progress? (i) higher capital-output ratio (ii) faster growth in output per worker (iii) faster growth in output O a. (i), (ii), and (iii) O b. Only (i) and (ii) O c. Only (1) and (iii) O d. Only (ii) and (iii)
- In the Solow growth model without population growth and technological progress, how can the steady state of an economy be described? (i) Total capital stock and total output are growing steadily over time. (ii) The change in capital stock per worker is zero. (iii) The level of investment per capita is equal to the depreciation of capital per person. O a. (i), (ii), and (iii) O b. Only (ii) and (iii) O c. Only (i) and (ii) O d. Only (i) and (iii)3 pts in the Solow model, the economy reaches a steady-state because as capital per worker increases O savings per worker is constant, while the population growth rate is contare and the depreciation rate of capital decen, ing that the economy w gro endogenously while the population growth rate and the depreciation rate of capital are comitant implying that the economy will converge to a sady O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant implying that the economy will gro endogenously Osaving perv state. O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant, implying that the economy will converge to a steady-stateQUESTION 22 whereas in the Solow model In the Romer model, the balanced growth path is equal to OAG-A; the steady-state level of capital is zero OB.0; infinity ; the growth rate declines as economy approaches the steady state O D. the level of the number researchers in an economy; capital is scarce OE. g=lL: there is a steady state G H. K. V. M Control Alt 無要換 Alt
- How can we measure growth over the very long run? Te poorest countries in the world have a per capita income of about $600 today. We can reason-ably assume that it is nearly impossible to live on an income below half this level (below $300). Per capita income in the United States in 2015 was about$51,000. With this information in mind, consider the following questions.(a) For how long is it possible that per capita income in the United Stateshas been growing at an average annual rate of 2% per year?(b) Some economists have argued that growth rates are mismeasured. Forexample, it may be difcult to compare per capita income today with percapita income a century ago when so many of the goods we can buy todaywere not available at any price then. Suppose the true growth rate in thepast century was 3% per year rather than 2%. What would the level of percapita income in 1800 have been in this case? Is this answer plausible?Consider a Solow growth model with a human capital augmented production function Y, = AK" H N-a- %3D Suppose that both physical and human capital are accumulated with constant savings rates sx and Sy respectively and depreciate at the common rate 8, that is K+1 - K, = sKY, - 8K, and H1 - H, = SKY, - SH, There is no growth in productivity A or raw labor N. "Suppose A = 1, a = ß = 1/4, sx = Sn = 0.12 and ô = 0.06. Let (a) y = YIN, k = KIN and h = HIN denote output per worker, physical capital per worker, and human capital per worker respectively. Let = hlk denote the intensity of human capital relative to physical capital. Calculate y, k, h and o in steady state. (b) . output per worker of the analogous Solow model without human capital (i.e., with Y, = AK" N- and A = 1, a = 1/2, s 0.12 and ô = 0.06. Explain the differences. How does steady state output per worker in this economy compare to the steady state * I Now consider the case a = 1/4 and ß = 3/4 with all the other parameters as in…1. Outline the basic features of Solow model with Human capital. Explain why Human capital is a key variable of many endogenous growth models?
- In the Solow growth model:1. Write the expression for consumption per capita in the steady-state equilibrium, asa function of capital per capita.2. What is the golden rule quantity of capital per capita ? Specifically, tell me thedefinition of this concept, and then relate it to the equation for the equilibriumconsumption per capita whose expression answers question (1) above.23. How do we find the golden rule savings rate, once we know the golden rule quantityof capital per capita?7. Explain how the Solow growth model differs from models of endogenous growth with respect to the sources of technological progress. Give at least one policy implication of the Endogenous growth models.Suppose that population growth increases. The Solow growth model with population growth and depreciation (but without technological progress) predicts that this will tend to deteriorate people's welfare because of: (i) lower total output (ii) lower output per worker (iii) lower consumption per worker O a. (i), (ii), and (iii) O b. Only (i) and (iii) O c. Only (ii) and (iii) O d. Only (i) and (ii)