Paul Krugman claims that the East Asian tigers grew because, among other things, they greatly increased the levels of education of their labor forces. But, he then shows that this investment in human capital will not permanently increase the rate of growth of the Asian economies.

1. What are the effects of increased education according to the Solow model? Explain precisely, what changes and what does not change as a result of an increase in human capital, using both graphs and words.
2. What is the role of quality education in achieving sustainable growth?

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The Solow model suggests that increasing human capital through investments in education can increase ... View the full answer