Suppose that the TFP parameter, As, in the Solow production function is the same across countries. What differs across countries is their savings rate, s. For the 1750 starter its savings rate is .25. Find the savings rate for a country that switches to Solow in 1950. Use the calibrated parameters from class. Also, assume the same population growth function holds in the 1750 starter and the 1950 starter.

Suppose that the TFP parameter, As, in the Solow production function is the same across countries. What differs across countries is their savings rate, s. For the 1750 starter its savings rate is .25. Find the savings rate for a country that switches to Solow in 1950. Use the calibrated parameters from class. Also, assume the same population growth function holds in the 1750 starter and the 1950 starter.

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Chapter1: Making Economics Decisions

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Question

Suppose that the TFP parameter, As, in the
Solow production function is the same
across countries. What differs across
countries is their savings rate, s. For the
1750 starter its savings rate is .25. Find the
savings rate for a country that switches to
Solow in 1950. Use the calibrated
parameters from class. Also, assume the
same population growth function holds in
the 1750 starter and the 1950 starter.

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