A change in the total amount of labour in the Romer model causes.. O a level effect only on GDP per capita O a growth rate effect only on GDP per capita both a level and growth rate effect on GDP per capita O none of the above
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- In the Solow model calculate the capita per output at the steady state level and show it on the diagram investment=9,5% population= 1,3% cobb douglas a=0.6Consider the Swan-Solow model of economic growth. In questionsb) A major shift in people’s values causes them to save less and spend more as a percentageof their income. Analyse the effects of this change on each of the curves in your diagram,and find the new steady state. Briefly discuss your finding in the context of economicgrowth.How does a fall in the growth rate of technology (g) affect equilibrium capital and consumption in the Ramsey model
- Please the answer correct please ASAP Don't answer by pen paper please. he golden rule level of capital refers to: Question 19Answer a. the level of capital that maximises output per worker. b. the level of capital that maximises the standard of living. c. the level of capital that maximises the level of output in the steady state. d. the level of capital that maximises consumption per worker. e. the level of capital that maximises consumption per worker in the steady state.Suppose the economy is on a balanced growth path in the Romer model, and then, in the year 2030, ̄l (lower case L bar) decreasesimmediately and permanently to the new level ̄l′ (lower case L bar one). (a) Solve for the new growth rate of knowledge and yt. (b) Make a graph of yt over time using a ratio scale.Assume there is a second economy ( country B ) with everything identical to country A except for the rate of population growth , which is 2 percent . Answer the following questions for country B. Assume both countries start a k = 0 , which country grows more in the short run ( before steady state is reached ) , as given by the rate of growth of output per worker ? ( hint : the further away from steady state , the faster the growth towards it ). O. Country A O. Same for both O. Country B
- Explain what is “Cointegration” with an economic example. Explain what is meant by “cointegration relationship between Y and X” and “Y and X are cointegrated.Consider the Swan-Solow model of economic growth. In questionsa) Briefly define the steady state and show it in your diagram. b) A major shift in people’s values causes them to save less and spend more as a percentageof their income. Analyse the effects of this change on each of the curves in your diagram,and find the new steady state. Briefly discuss your finding in the context of economicgrowth.Suppose an economy begins in steady state. By what proportion does per capita GDP change in the long run in reponse to each of the following changes? Production function is Y=AK^1/3L^2/3 d. Earthquake destrys 75% of the capital stock e. Generous immigration policy lead the population to double Fast answer
- A4 Paul Krugman claims that the East Asian tigers grew because, among other things, they greatly increased the levels of education of their labour forces. But, he then shows that this investment in human capital will not permanently increase the rate of growth of the Asian economies. What are the effects of increased education according to the Solow model? Explain precisely, what changes and what does not change as a result of increases in human capital, using both graphs and words.SOLOW’S MODEL Consider following information from China and New Zealand in table: China New Zealand Real per capita GDP growth, 2012-2019 (average %) 6.5% 1.6% Real GDP per capita, 2012 (in constant 2017 USD) 11,169 32,989 Real GDP per capita, 2019 (in constant 2017 USD) 16,655 45,555 Average savings rate, 2012-2019 (% of real GDP) 43.7% 21.4% Capital stock, 2019 (in millions of constant 2017 USD) 14,283,969 409,160 Population (in millions) 1,434 4.8 Population growth (in %) 0.5% 1% Capital depreciation rate (in %) 3% 3% Production function in both economies has following functional form: Yt = A* K1/3 * L2/3 Where Yt denotes aggregate GDP in period t, Kt is aggregate capital stock, Lt is employment (assumed equal for whole population) and A is total factor productivity. Using information provided in table, explain from SOLOW MODEL perspective what factors could explain differences in average GDP per capita…a.Assume that α(0, 1). Draw a diagram that describes the evolution of kt, and show that there exists a unique steady state, k* > 0. Label properly. also Find the expressions for the steady state variables k*, y*, and c* in terms of the parameters of the model. , b.Now, assume that α = 1. Draw a diagram that describes the evolution of kt, and show that income per worker can grow indefinitely in this case. Label properly. c.Discuss the key difference(s) between the scenario in a and b as much as you want.
