Consider the human capital growth model with the representative consumer. The efficiency pa- rameter of human capital accumulation technology is b. The total productivity factor is given by z = 1.5. Denote by Ht the human capital accumulated in period t, and by u the time spent working in period t. Assume the initial human capital is H0 = 1. Now, assume the consumer has to choose between (u1, b1) = (0.9, 10.35) and (u2, b2) = (0.8, 5.20).

1. Using the predictions of the Endogenous Growth Model for the consumption path, which set of (u, b) will you recommend to the consumer in the long term. [06pts]
2. After how many years is your recommendation valid? [09pts]