Suppose that two countries both share a common technology and that

both countries have the same savings rate s, technology growth rate g and

population growth rate n. Suppose further that one economy (US) is in steady

state, whereas the other (Mexico) has a per capita output level that is one fourth

the US level. Under the additional assumptions listed below, how many model periods will

it take Mexico to have a per capita output level that is one half the US level?

Check attached file for additional assumptions.

Additional Assumptions: F(Kt, LtAt) = (Kt).3(LtAt).7, At+1 = At (1 + g) Kt+1 = Ke(1 - 6) + It, It = sF(Kt, LtAt), Lt+1 = Le(1 + n) 6 =.06 - depreciation rate n = 0 - population growth rate g = .02 - technology growth rate s = .2 - savings rate