Suppose the parameters of the Romer model take the following values: A 0 = 100, l =
Question:
Suppose the parameters of the Romer model take the following values:
A̅ 0 = 100, l̅ = 0.10, z̅ = 1 /500, and L̅ = 100.
(a) What is the growth rate of output per person in this economy?
(b) What is the initial level of output per person? What is the level of output per person after 100 years?
(c) Suppose the research share were to double. How would you answer parts (a) and (b)?
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