onsider twd developed and developing countries, the population growth rate of eveloped countries is 2 percent per year and saving rate of 30 percent. The eveloping country has a population growth rate of 5 percent and saving rate of 10 ercent. Suppose that initial technology of the developed country is 10 times higher han that of the developing country and that both countries have the same productivity growth and depreciation rate: g 0.02 and 6 = 0.03. Assume that a = 1/ B. In a steady state, how much is the developed country's GDP per capita larger than zhe developing country?

onsider twd developed and developing countries, the population growth rate of eveloped countries is 2 percent per year and saving rate of 30 percent. The eveloping country has a population growth rate of 5 percent and saving rate of 10 ercent. Suppose that initial technology of the developed country is 10 times higher han that of the developing country and that both countries have the same productivity growth and depreciation rate: g 0.02 and 6 = 0.03. Assume that a = 1/ B. In a steady state, how much is the developed country's GDP per capita larger than zhe developing country?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider twd developed and developing countries, the population growth rate of
developed countries is 2 percent per year and saving rate of 30 percent. The
developing country has a population growth rate of 5 percent and saving rate of 10
percent. Suppose that initial technology of the developed country is 10 times higher
than that of the developing country and that both countries have the same
productivity growth and depreciation rate: g = 0.02 and 6 = 0.03. Assume that a = 1/
3. In a steady state, how much is the developed country's GDP per capita larger than
the developing country?

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