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Find out the two possible fiscal policy solutions for the problem.

The Solow model and relative country Performance: Consider the real world data for South Korea and South Africa for the year 2000. Capital/Worker (K/N) and GDP/Worker (Y?N) are expressed in 2000 dollars

Pop. Growth

Savings Rate

Capital/Worker

GDP/Worker

.0106

.325

91495

33202

.01675

.1796

22704

20315

Assuming that the depreciation rate, d = .05 and the share in the Cobb-Douglass production function, Θ=.35 is the same for countries. what will happen to their relative output per worker in the long run? Will South Africa catch up?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M920843

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