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"Romer's model of endogenous growth" Consider Romer's model of endogenous growth.

a). Suppose first that the production function is as follows:

where α = 0.1 and β = 0.

Using the equation in the text, what will be the growth rate of per capita income? In such a situation, under what circumstances might per capita income growth be increased?

b). Suppose instead that with the same production function α = 0.1 and β= 1.1. Once again using the equation in the text, what will be the growth rate of per capita income?

 

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M939556

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