How do you compare the steady state level of capital per worker in these countries? Illustrate graphically. Explain the economic intuition for the di erences in capital per worker in steady state. b. Which country a higher output per worker in steady state? What about investment per worker in steady state? Explain carefully.
Consider the Solow Model with no population or technological growth. Suppose that two countries
are identical except that in Country A the
Country B.
a. How do you compare the steady state level of capital per worker in these countries? Illustrate
graphically. Explain the economic intuition for the di erences in capital per worker in steady
state.
b. Which country a higher output per worker in steady state? What about investment per worker
in steady state? Explain carefully.
As per solow model, steady capital arrives when depreciation is equal to savings or investment in the economy is equal to depreciation. Which would imply that the change in capital stock is zero.
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