Chapter20: Economic Growth In The Global Economy
Section: Chapter Questions
Problem 5P
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![) The goal is to analyze further the two-sector endogenous growth model.
Write down the equation of motion for k, which shows delta k as saving minus break-even
investment. (Break-even investment is the amount of investment needed to keep capital per
effective worker constant.) Draw a graph that determines the steady-state k. In this
economy, what's the steady-state growth rate of output per work? How do the saving rate
and fraction of labor force in universities (u) affect this steady-state growth rate?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd8fa6a66-eb5a-48e4-9b45-07098ecf6f3f%2Fd3ebf5d9-de67-4bf1-8030-36282dffca23%2Ftltzjgb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:) The goal is to analyze further the two-sector endogenous growth model.
Write down the equation of motion for k, which shows delta k as saving minus break-even
investment. (Break-even investment is the amount of investment needed to keep capital per
effective worker constant.) Draw a graph that determines the steady-state k. In this
economy, what's the steady-state growth rate of output per work? How do the saving rate
and fraction of labor force in universities (u) affect this steady-state growth rate?
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