Could differences across countries in population growth account for the persistence in income disparity across countries? Use the Solow growth model to address this question and discuss.
Answer to relevant QuestionsIn the Solow growth model, suppose that the per-worker production function is given by y = zk.3, with s = 0.25, d = 0.1, and n = 0.02.(a) Suppose that in country A, z = 1. Calculate per capita income and capital per ...Suppose there are two countries. In the rich country, the representative consumer has Hr units of human capital, and total factor productivity is zr. In the poor country, the representative consumer has Hp units of human ...Suppose that the government introduces a tax on interest earnings. That is, borrowers face a real interest rate of r before and after the tax is introduced, but lenders receive an interest rate of (1 – x)r on their ...Suppose in our two-period model of the economy that the government, instead of borrowing in the current period, runs a government loan program. That is, loans are made to consumers at the market real interest rate r, with ...In the example (“Limited Commitment and Market Interest Rates”), suppose that v < y' and y'/y < a < b.(a) Suppose that t = t’ = 0. Determine the equilibrium real interest rate, and the equilibrium quantities of current ...
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