Question

As reflected in the modeling decisions made by Lucas in his human capital model, which features of Romer's Learning-by-Doing model did Lucas find unsatisfying? Select all that apply

A) it achieved sustained growth via gains in labor productivity

B) Gains in labor productivity were modeled as solely from free learning-by-doing when accumulating more capital

C) It failed to produce catch-up growth

D) It failed to accommodate rational expectations

Answer 1

Prof. Lucas human capital model based on Romer's learning by doing model Lucas find satisfactory.

because a) it achieved sustained growth via gains in labor productivity

b)gain in labor productivity was modeled as solely from free learning by doing when accumulating more capital.

the other two options

c) it failed to produce catch up growth is the reverse statement of the A

d) it failed to accommodate rational of expectation. it is not accepted as the model proves a sucessful endogeneous growth model.