Question: 4.6. Consider the model in Problem 4.5. (a) What are the balanced-growth-path values of k and h in terms of sk, sh, and the other

4.6. Consider the model in Problem 4.5.

(a) What are the balanced-growth-path values of k and h in terms of sk, sh, and the other parameters of the model?

(b) Suppose α = 1/3 and β = 1/2. Consider two countries, A and B, and suppose that both sk and sh are twice as large in Country A as in Country B and that the countries are otherwise identical. What is the ratio of the balanced-growth-path value of income per worker in Country A to its value in Country B implied by the model?

(c) Consider the same assumptions as in part (b). What is the ratio of the balanced-growth-path value of skills per worker in Country A to its value in Country B implied by the model?

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