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.
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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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- What do the growth accounting studies conclude are the determinants of growth? Which is more important, the determinants or how they am combined?3 pts in the Solow model, the economy reaches a steady-state because as capital per worker increases O savings per worker is constant, while the population growth rate is contare and the depreciation rate of capital decen, ing that the economy w gro endogenously while the population growth rate and the depreciation rate of capital are comitant implying that the economy will converge to a sady O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant implying that the economy will gro endogenously Osaving perv state. O marginal savings per worker diminishes, while the population growth rate and the depreciation rate of capital are constant, implying that the economy will converge to a steady-stateMany demographers predict that the UnitedStates will have zero population growth in thetwenty-first century, in contrast to average popu-lation growth of about 1 percent per year in thetwentieth century. Use the Solow model to fore-cast the effect of this slowdown in populationgrowth on the growth of total output and the growth of output per person. Consider theeffects both in the steady state and in the transi-tion between steady states.
- According to the Solow model, an increase to the savings rate will increase income per worker in the steady-state, but will have no effect on long-run growth rate of income per worker. O increase consumption per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase the long-run growth rate of income per worker if and only if the new steady-state capital per worker is greater than the golden rule level of capital per worker. O increase income per worker in the steady-state and long-run growth rate of income per worker.QUESTION 22 whereas in the Solow model In the Romer model, the balanced growth path is equal to OAG-A; the steady-state level of capital is zero OB.0; infinity ; the growth rate declines as economy approaches the steady state O D. the level of the number researchers in an economy; capital is scarce OE. g=lL: there is a steady state G H. K. V. M Control Alt 無要換 AltConsider the Solow growth model with concave production function as studied in class. Supposethe economy is initially in the picture below, and currently has the level of capital stock of K0. What wouldhappen to the dynamics of capital accumulations when depreciation rate increases? Graphically denote thedirection and the speed of change/accumulation/decumulation of the capital stock, then verbally explain whythey move like so.
- Suppose we are considering a Solow Model without technology progress. Y = KAL Population growth rate=D0.03 The capital accumulation is sY-dK s=0.2, d=0.07 Please calculate the capital per capita under the steady state. O A. 20 ОВ. 16 Ос. 24 OD. 8 O E. 4 OF. 12Consider a Solow growth model with a human capital augmented production function Y, = AK" H N-a- %3D Suppose that both physical and human capital are accumulated with constant savings rates sx and Sy respectively and depreciate at the common rate 8, that is K+1 - K, = sKY, - 8K, and H1 - H, = SKY, - SH, There is no growth in productivity A or raw labor N. "Suppose A = 1, a = ß = 1/4, sx = Sn = 0.12 and ô = 0.06. Let (a) y = YIN, k = KIN and h = HIN denote output per worker, physical capital per worker, and human capital per worker respectively. Let = hlk denote the intensity of human capital relative to physical capital. Calculate y, k, h and o in steady state. (b) . output per worker of the analogous Solow model without human capital (i.e., with Y, = AK" N- and A = 1, a = 1/2, s 0.12 and ô = 0.06. Explain the differences. How does steady state output per worker in this economy compare to the steady state * I Now consider the case a = 1/4 and ß = 3/4 with all the other parameters as in…Use the Solow model with exogenous growth to answer the following. Following a reduction in the population growth rate, output per worker growth temporarily increases. O True O False The golden rule rate of saving is the rate of saving that maximizes steady state output per effective worker. O True O False The only way to increase the long-run growth rate of output per worker is to increase the growth rate of labor efficiency. O True O False Following an increase in TFP, output per worker growth temporarily declines. O True O False
- In the Solow growth model:1. Write the expression for consumption per capita in the steady-state equilibrium, asa function of capital per capita.2. What is the golden rule quantity of capital per capita ? Specifically, tell me thedefinition of this concept, and then relate it to the equation for the equilibriumconsumption per capita whose expression answers question (1) above.23. How do we find the golden rule savings rate, once we know the golden rule quantityof capital per capita?estion 30 A country with neither population growth nor technological progress is nitaly in the golden-rule steady state. Carefuly ilustrate this situation using a graph with output per worker, investment per worker, and depreciation per worker on the vertical axis and capital per worker on the horizontal axis. Now suppose climate change increases the depreciation rate. If the country adjusts its saving rate to reach the new golden- rule steady state, is it possible to determine how output per worker and consumption per worker in the new steady state compare to their levels in the initial steady state? Explain.Consider the Solow-Swan model. Which of the following statements is FALSE? O The higher the saving rate the higher the steady state level of capital per worker O In steady state, output per worker does not depend on the level of total factor productivity O The higher the depreciation rate the lower the steady state level of capital per worker If investment is greater than total depreciation, the capital stock increases