Question: Using the Solow growth model, explain why the following two facts are inconsistent with each other: (i) Countries differ in per capita income by magnitudes

Using the Solow growth model, explain why the following two facts are inconsistent with each other:

(i) Countries differ in per capita income by magnitudes on the order of 1 to 10.

(ii) The richest countries may have national saving rates around 0.3; the poorest have rates around 0.05

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