class we argued that if people could accumulate human as well as physical capital, the production function would look like the “AK” production function. • (a) If the production function is AK and the savings rate is constant at rate “s”, and the rates of depreciation and populati on growth are δ and n respectively, what would the growth rate of the economy be? • (b) What would be the macroeconomic
In class we argued that if people could accumulate human as well as physical capital, the production function would look like the
“AK” production function.
• (a) If the production function is AK and the savings rate is constant at rate “s”, and the rates of
growth are δ and n respectively, what would the
• (b) What would be the
• (c) What would be the consequences of an increase in fertility in this economy?
• (d) Would the consequences of decreasing fertility be UNAMBIGUOUSLY GOOD?
• (e) Can human capital grow without bounds? Explain why or why not (make sure you discuss the physical nature of human
capital).
• (f) What is the growth rate of the economy (in the absence of technological progress) if human capital cannot grow without
bounds?
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