= Suppose in a Solow model, we have the following parameter values: n=0, s = 0.2, a = 0.33. There is no growth in the total factor productivity so that A, A1. Moreover, we know that at time 0, the economy is at a steady state so that k = k, =1. Now imagine that a deadly pandemic hits the economy at time t=1. As a result, the population at time t =1 is 10% lower than the population at time t-0. The pandemic is a one-time shock so that population growth rate remains the same, i.e., from t=2 onward, the population remains the same as the population at time t-1. The total capital stock, however, is unchanged so that K₁ Ko. What is the growth rate of per-capita capital in percentage (rounded to the 2 decimal places, e.g., answer 1.08 if your calculation shows the growth rate is 0.01079) at time t-3 from time t=2?

= Suppose in a Solow model, we have the following parameter values: n=0, s = 0.2, a = 0.33. There is no growth in the total factor productivity so that A, A1. Moreover, we know that at time 0, the economy is at a steady state so that k = k, =1. Now imagine that a deadly pandemic hits the economy at time t=1. As a result, the population at time t =1 is 10% lower than the population at time t-0. The pandemic is a one-time shock so that population growth rate remains the same, i.e., from t=2 onward, the population remains the same as the population at time t-1. The total capital stock, however, is unchanged so that K₁ Ko. What is the growth rate of per-capita capital in percentage (rounded to the 2 decimal places, e.g., answer 1.08 if your calculation shows the growth rate is 0.01079) at time t-3 from time t=2?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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