-Explain what would happen to long-run growth if instead theproduction function for ideas is À = A(1 – I)Lº, with 0 < 1 and I, Lconstant. Hint: First calculate the growth rate À/A and sketch it in atime vs. A/A diagram. The Romer model focuses on the production of (non-rival) ideas. Wehave assumed the production function for ideas to be À = A(1 – l)L

The Romer model of economic growth is an influential economic theory that focuses on the role of…

Explain what would happen to long-run growth if instead the production function for ideas is À = A(1 − 1)Lº, with 0 < 1 and l, L constant. Hint: First calculate the growth rate A/A and sketch it in a time vs. A/A diagram.

Explain what would happen to long-run growth if instead the production function for ideas is À = A(1 − 1)Lº, with 0 < 1 and l, L constant. Hint: First calculate the growth rate A/A and sketch it in a time vs. A/A diagram.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

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Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

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Explain what would happen to long-run growth if instead the
production function for ideas is À = A(1 – I)Lº, with 0 < 1 and I, L
constant. Hint: First calculate the growth rate À/A and sketch it in a
time vs. A/A diagram.

The Romer model focuses on the production of (non-rival) ideas. We
have assumed the production function for ideas to be À = A(1 – l)L

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