Question

In 1990, the Dominican Republic (DR) and Egypt had similar saving rates (around 15% of GDP),...

In 1990, the Dominican Republic (DR) and Egypt had similar saving rates (around 15% of GDP), similar population growth rates (around 2%) and similar levels of income per capita (around $6000 in 2005 dollars). In the 1990-2017 period, the saving rate stayed about the same in DR but decreased to below 4% in Egypt, while the population growth rate stayed the same in Egypt but decreased to about 1% in DR. Assume that multifactor productivity increased the same in both countries over this period. a) Use the Solow model to predict the effects on the steady-state income per capita for both countries and compare. b) In 2017, income per capita was around $14,600 in DR, and $10,500 in Egypt. Is this consistent with your theoretical predictions from (a)? The prime minister of Egypt calls its population growth “the single largest challenge facing the state” (The Economist, February 20, 2020). Is this justified?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In 1990, the Dominican Republic (DR) and Egypt had similar saving rates (around 15% of GDP),...
In 1990, the Dominican Republic (DR) and Egypt had similar saving rates (around 15% of GDP), similar population growth rates (around 2%) and similar levels of income per capita (around $6000 in 2005 dollars). In the 1990-2017 period, the saving rate stayed about the same in DR but decreased to below 4% in Egypt, while the population growth rate stayed the same in Egypt but decreased to about 1% in DR. Assume that multifactor productivity increased the same in both...
In 1970, Benin and Botswana had similar saving rates (around 3% of GDP) and similar levels...
In 1970, Benin and Botswana had similar saving rates (around 3% of GDP) and similar levels of income per capita (around $600 in 2005 dollars). In the 1970-2017 period, Benin’s saving rate gradually increased to 10%, whereas Botswana’s increased to 30%. Assume that multifactor productivity increased the same in both countries over this period. (a) Use the Solow model to predict the effects on the steady-state income per capita for both countries and compare. (b) In 2017, income per capita...
(a) Oil prices have fallen by about a third since December of last year. Is this...
(a) Oil prices have fallen by about a third since December of last year. Is this a positive or a negative aggregate supply shock for China, a net importer of oil? Use the labor market and the production function to predict the effects of lower oil prices on employment, output, and the real wage in China. (b) Because of a decrease in the working-age population, Chinese labor force is now shrinking (The Economist, Feb 23, 2019). How does this change...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT