Consider Romer Model 2. Suppose there are two countries, rich and poor one. Both countries have the same population size, L and the same knowledge generation productivity parameter, z. At the beginning, time 0, the rich country has more knowledge stock than the poor one, Ar0 > Ap0, where subscript labels time and superscript labels country being rich or poor. However, the fraction of researchers in poor country is larger than the one in rich country, ̄lp > ̄lr . Question 4 Part a In which country, would you prefer to live in the short-run? How about in the long-run?
Consider Romer Model 2. Suppose there are two countries, rich and poor one. Both countries have the same population size, L and the same knowledge generation productivity parameter, z. At the beginning, time 0, the rich country has more knowledge stock than the poor one, Ar0 > Ap0, where subscript labels time and superscript labels country being rich or poor. However, the fraction of researchers in poor country is larger than the one in rich country, ̄lp > ̄lr . Question 4 Part a In which country, would you prefer to live in the short-run? How about in the long-run?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider Romer Model 2. Suppose there are two countries, rich and poor
one. Both countries have the same population size, L and the same knowledge
generation productivity parameter, z. At the beginning, time 0, the rich country
has more knowledge stock than the poor one, Ar0 > Ap0, where subscript labels
time and superscript labels country being rich or poor. However, the fraction
of researchers in poor country is larger than the one in rich country, ̄lp > ̄lr .
Question 4 Part a
In which country, would you prefer to live in the short-run? How about in the
long-run?
How long would it take for the poor country to reach rich one’s per capita
output level? Show your results analytically and graphically as well. (If you pre-
fer solving this question numerically by assigning values to the above parameters
and variables, feel free to do so
one. Both countries have the same population size, L and the same knowledge
generation productivity parameter, z. At the beginning, time 0, the rich country
has more knowledge stock than the poor one, Ar0 > Ap0, where subscript labels
time and superscript labels country being rich or poor. However, the fraction
of researchers in poor country is larger than the one in rich country, ̄lp > ̄lr .
Question 4 Part a
In which country, would you prefer to live in the short-run? How about in the
long-run?
How long would it take for the poor country to reach rich one’s per capita
output level? Show your results analytically and graphically as well. (If you pre-
fer solving this question numerically by assigning values to the above parameters
and variables, feel free to do so
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