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Problem 2 a. The predictions of the Solow growth model lead us to be optimistic about...

Problem 2

a. The predictions of the Solow growth model lead us to be optimistic about the prospects of poorer countries to

reaching the standard of living of richer countries in the very long run. What element in the Solow model of growth drives this result? Is this result confirmed in the data?

b. A given rate of growth may be driven by a high rate of capital accumulation and/or a high rate of technological progress. Does the source of growth matter for assessing the growth prospects of an economy?

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