Question

What is the impact of δ on the steady-state solution of the Solow
model? Why is this?

Answer #1

refers to Depreciation in solow model

Increase in

1) Intuitively: economist think that higher depreciation ()should
lead to lower capital (k) accumulation and lesser/lower
steady-state level of k and y

2) Graphically: An rise in
makes the break-even line ( n + g +
) k steeper, leading to k < 0 at original k* and movement to the
left side

3) Economy converges to new steady-state growth path with a lesser k* and y*

4) Again, all these are level effects, not growth effects: the growth rates are the equal ( same)

For any query please comment

What is the “steady state” in the Solow growth model? How is it
reached from some other initial situation in which the conditions
required for the steady state are not satisfied?

what are the main conclusions of the solow growth model, explain
steady state as part of your answer?

According to the Solow growth model, why do all countries tend
to converge to a steady state?

In the steady state of the Solow model, higher population growth
leads to a _________ level of income per worker
and _________ growth in total income.

In the steady state of the Solow model, at what rate does output
per person grow? At what rate does capital per person grow? How
does this compare with the U.S. experience?
please write it in your own words

According to the Solow model of growth, growth, in the long run
(the steady-state), determine only by growth in technology.
However, in the Solow model, there is nothing about how technology
determined. What factors do you think might affect technology in
the long run? Justify your answer and explain the implications to
the growth in the long run?

1) In the steady state of the Solow model with technological
progress, which of the following variables is not
constant?
(a) capital per effective worker
(b) the real rental price of capital
(c) the real wage
(d) the capital-output ratio
2) The U.S. economy has more/less capital than at
the Golden Rule steady state, suggesting that it may be desirable
to
increase/decrease the rate of saving.
3) The purpose of exogenous/endogenous
growth theory is to explain technological progress. Some of these...

In the Solow growth model of an economy with population growth
and technological progress, the steady-state growth rate in output
per worker is equal to:
(a) zero
(b) the rate of technological progress g.
(c) the growth rate of population n plus the rate of technological
progress g. (d) the rate of technological progress g minus the
growth rate of population n.
In the Solow growth model of an economy with population growth
and technological progress, the steady-state growth rate...

Use the Solow-Swan model to explain what would happen to steady
state capital per
effective worker resulting from:
a. A decrease in the population growth rate.
b. An increase in labor productivity.
c. An increase in the investment share of GDP.

In the solow growth model, the steady-state growth rate of
output per worker is ________
(a) equal to the sum of the rate of technological progress plus
the rate of population growth
(b) greater than zero
(c) equal to zero
(d) less than zero

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 19 minutes ago

asked 25 minutes ago

asked 26 minutes ago

asked 32 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago

asked 2 hours ago