Three Irish sisters are thinking about emigrating in 1870. The optionsare going to the United States or Argentina, or staying in Ireland. They cannot agree where to goand split up. One stays in Ireland, one emigrates to the United States and one to Argentina. Thefollowing table provides information on real GDP per capitain 1870, 1913, and 1929 in Ireland, theUnited States and Argentina expressed in U.S. dollars of 1990, which we will use to analyze how eachdid.real GDP per capita1870 1913 1929Ireland 1,775 2,736 2,824United States 2,445 5,301 6,899Argentina 1,311 3,797 4,367Data Source: The Maddison-Project(http://www.ggdc.net/maddison/maddison-project/home.htm).In answering the following questions, please show your work.(a) Using GDP per capita as a measure of wealth, how much richer or poorer was the average Irishrelative to the average American and Argentine in 1870? Express your answer in percent.(b) Compute the average growth rate of per capita GDP in each country between 1870 and 1913.(c) Compute the present value of income in each country between 1870 and 1913 assuming that realGDP per capita grew at a constant rate between 1870 and 1913 and that the discount rate is 3percent per year. Ex post, from the viewpoint of 1913, which sister made the best choice andwhy. Which one made the worst choice and why. Explain
(Growth Differentials.)Three Irish sisters are thinking about emigrating in 1870. The optionsare going to the United States or Argentina, or staying in Ireland. They cannot agree where to goand split up. One stays in Ireland, one emigrates to the United States and one to Argentina. Thefollowing table provides information on real
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