ECON 4710 Chapter : Ec4710fall2015 Hw2
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This question asks you to use the solow model to study this scenario. To keep the problem simple, let?s assume the sole result of these technology transfer policies is to increase. A by a large and permanent amount, one time. Answer the following questions: (a) analyze this change using a solow diagram. What happens to the economy over time? (b) draw a graph showing what happens to output in china over time. What happens to output per person in china in the long run? (c) draw a graph showing what happens to the growth rate of output in. Be sure to write your answer in terms of kt and parameters of the model only. For example, use the fact that sy /k = d. 1: growth rates in the solow model (ii): suppose an economy begins in steady state and is characterized by the following parameter values: S = 0. 2, d = 0. 1, a = 1, l = 100.
