4 Consider the context of the Solow model with technical progress in an excess saving scenario, that is,the savings rate is higher than the golden rule savings rate. Imagine that the economy started is in steady state, but at time t0 the saving rate increases suddenly. Elaborate graphs that show the evolution over time of the variables mentioned in the followingparagraphs as a result of the previous event .a) Growth rate of capital per effective workerb) Growth rate of capital per workerc) Capital growth rated) Natural logarithm of capital per effective workere) Natural logarithm of capital per workerf) Natural logarithm of capital
4
Consider the context of the Solow model with technical progress in an excess saving scenario, that is,the savings rate is higher than the golden rule savings rate. Imagine that the economy started is in steady state, but at time t0 the saving rate increases suddenly. Elaborate graphs that show the evolution over time of the variables mentioned in the following
paragraphs as a result of the previous event
.
a) Growth rate of capital per effective worker
b) Growth rate of capital per worker
c) Capital growth rate
d) Natural logarithm of capital per effective worker
e) Natural logarithm of capital per worker
f) Natural logarithm of capital
In the slow modal, a rise in population growth improves aggregate production growth rate but has no long-term impact on per capita output growth rate. The steady-state level of per capita output decreases as the population growth rate rises.
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