In short the only difference is the exponent of at in the, Ask an Expert

Economics

Consider Romer's growth model of Chapter 6 and let A ?0 = 100, ?l = 0.06, z ? = 1/3000, and L ? = 1000.

a) What is the growth rate of output per person in this economy?

b) What is the initial level of output per person? What is the output per person in 100 years?

c) How do your answers in parts a,b change if the follwoing changes occur? A doubling of A ?0, a doubling of ?l, a doubling of the population L ?, and a doubling of z ?. (Note: Explain these changes one at a time).

d) If you could advocate for one of the changes above, which one would you choose? Why?

Problem 3: Consider the following simple variation of the Romer model. Yt = A1/2Lyt,

t At+1?At = z ?AtLat,

Lyt+Lat = L ?, Lat = ?lL ?.

In short, the only difference is the exponent of At in the (final good) production function, so that now there are diminishing returns to ideas in that sector.

a) Provide an economic interpretation for the first equation.

b) What is the growth rate of knowledge in this economy?

c) What is the growth rate of output per person in this economy?

View complete question

Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M9472070
Price:- $50

Guranteed 36 Hours Delivery, In Price:- $50

Have any Question?Write your Review or question?

Related Questions in Macroeconomics

Question positions on whether the constitution should be

Question: Positions on whether the Constitution should be amended to require a balanced budget reflect opposing views about whether such an amendment would be an appropriate solution to the problem of persistent federal ...

Economics assignment -part a microeconomicsconsider the

Economics Assignment - Part A: Microeconomics Consider the following three sources. Source 1. Macquarie Analysis: Woolworths Trails Coles on Grocery Prices (by Catie Low) Source 2: Supermarkets Price War Source 3: Suppor ...

Assignment 2 global economy national economies and

Assignment 2: Global Economy, National Economies, and Competition In the first part of the twenty-first century a great recession struck most of the countries in the world. The next decade has been severally impacted wit ...

Question at the farmers market in irvine california the

Question: At the farmer's market in Irvine, California, the price of avocados is set at $3 each. At that price, 120 avocados are supplied but only 100 are purchased. Represent this on a supply and demand graph and answer ...

Question - quasimodo consumes earplugs and other things his

Question - Quasimodo consumes earplugs and other things. His utility function for earplugs (E) and other consumption (C) is given by U(E, C) = 100E - (E^2)/2 + C Normalize the price of a unit of other consumption, C, to ...

Question the price of cds is 15 and the price of pizzas is

Question: The price of CDs is $15 and the price of pizzas is $10. Derek spends all of his income buying 2 CDs and 6 pizzas per week (and nothing else). Determine Derek's income, draw his budget line and represent his uti ...

Question - explain why it is important to evaluate the

Question - Explain why it is important to evaluate the overall performance of the firm's sales force and list the advantages and disadvantages of sales, cost, and profit analyses. Also, discuss the use of ROI in measurin ...

Question - suppose that coca-cola is currently paying a

Question - Suppose that Coca-Cola is currently paying a dividend of $2.74 per share, the dividend is expected to grow at a rate of 4% per year, and the rate of return investors require to buy Coca-Cola's stock is 10%. Ca ...

Question use an internet search or the university library

Question: Use an internet search or the University Library to locate information on the Consumer Price Index (CPI). Internet sites you might find useful include the Bureau of Labor Statistics (BLS) and the Federal Reserv ...

Question consider the technology represented by y x104

Question: Consider the technology represented by y = (x_1)^0.4 (x_2)^0.6. The marginal products are MP_1 = 0.4/x_1 and MP_2 = 0.6/x_2. We now consider the problem of cost minimization. Write the problem of cost minimizat ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Macroeconomics Expert