The economic growth model(s) of ( ) below can be recognized as an endogenous model. A Slow-Swan model; B Ricardo’s model; C Romer-Lucas model; D Harrod-Domar model; E Aghiot-Howitt model
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- The
economic growth model(s) of ( ) below can be recognized as an endogenous model.
A Slow-Swan model; B Ricardo’s model; C Romer-Lucas model; D Harrod-Domar model; E Aghiot-Howitt model.
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- We have an innovation-based Schumpeterian model in which productivity and aggregate output growth are driven by product improvements, which are driven in turn by spending on Research and Development (R&D). However, as the economy becomes larger, and more technologically advanced, it becomes more complex.Ricardo’s economic growth model can be recognized as an endogenous model. True or FalseIn the Malthusian model, suppose that the quantity of land increases. A) using diagrams, determine what effects this has in the long-run steady state and explain your results. b)Plot what happens to the following variables over time as a result of the increase in the quantity of Land, population size and consumption per person
- What is the main takeaway implication of the Malthusian growth model? In particular, what policy recommendation did Malthus derive from the set of mechanisms he thought was operating in the economy?(a) Consider an economy that is initially in a steady state equilibrium. Assume that in this equilibrium it has a saving rate of 50 per cent and a depreciation rate of 2 per cent. Further assume that the population growth rate is 3% and that the level of output produced can be represented by the following production function: = where A = 1 and = 0.5. Use the Solow-Swan model to determine the level of capital per worker and output per worker in this economy. (1 mark) (b) Now suppose the government introduces a set of policies to improve the institutional set up as well as better production technique which increases total factor productivity by double. What is the new steady state level of capital per worker and output per worker? (1 mark) (c) Use a Solow-Swan diagram to show the qualitative effects of this new government policy upon steady state output per worker and capital per worker. Briefly describe the intuition behind this result. (1 mark) (d) Now suppose, population growth rate…In the endogenous growth model, a) the growth rate of human capital is equal to the growth rate of output. b) the growth rate of output is greater than to the growth rate of human capital. c) None of the answers are correct d) the growth rate of capital is less than the growth rate of output. e) the growth rate of human capital is greater than the growth rate of output.
- In the Romer model, if an economy's share of researchers decreases, there will be A) an immediate decrease in output and output growth will slow. B) an immediate increase in output and output growth will slow. C) an immediate increase in output and output growth will accelerate. D) an immediate decrease in output and output growth will accelerate. E) no change in output but output growth will slow.Consider the Solow-Swan growth model, with a savings rate, s, a depreciation rate,8, and a population growth rate, n. The production function is given by: Y = AK + BK¹/2 H¹/4L¹/4 where A and B are positive constants. Note that this production is a mixture of Romer's AK model and the neoclassical Cobb-Douglas production function. (a) Express output per person, y =Y/L, as a function of capital per person, k =K/L.Consider a steady-state equilibrium in the model of Section 14.4. Suppose that κ = 0 and G’ (0) ∗ ≡ G’−1 ((1− λ)/ρ), and suppose also that (a) Show that in this case the steady-state equilibrium has zero growth. (b) Show that κ > 0 leads to a positive growth rate. Interpret this result, and contrast it to the negative effects of relaxing the protection of IPR in the baseline model of Schumpeterian growth.
- Consider the Swan-Solow model of economic growth. [Hint: Question (e) below goes beyond the subject matter discussed in the lecture and requires you to think independently.] a) Draw a suitable diagram with a typical Aggregate Production Function in it. b) Draw a typical Investment curve into the diagram. Briefly explain how you came up with the curve and what you need to know to exactly pin it down. c) Draw a typical Depreciation curve into the diagram. Briefly explain how you came up with the curve and what you need to know to exactly pin it down. d) Briefly define the steady state and show it in your diagram. e) It has been argued that corruption affects economic growth (e.g. Mankiw/Taylor, 5th ed., pp. 479-480). Explain which of the curves in your diagram is most plausibly affected by a reduction in corruption in an economy, and what this effect would be. f) Use your diagram to show how the effect that you have identified in part (e) affects the steady state in the model.Consider the following numerical examples for the Solow Growth Model: Economy A z=1 s=0.5 F(K,N)=K0.3N0.7 n=0.01 d=0.1 Economy B z=1 s=0.2 F(K,N)=K0.3N0.7 n=0.01 d=0.1 In which economy is Consumption per capita higher in steady state? O Economy A O Economy B Not enough InformationConsider an economy described by the textbook Solow model with the following Cobb-Douglas production function: Y = ÅK°L*. %3D where a The economy is producing 100 units of output and the productivity parameter is equal to 1. the depreciation rate is 6%, the investment rate is 24%, and there are 64 workers, the growth rate of total output Y, is positive and the economy is converging to to its steady-state output per capita of 100 units. Question 6 total depreciation exceeds gross investment, the economy is below its steady state and outout per person is growing at a positve rate Question 7 Starting from steady state a permanent decrease in the rate of depreciation in the Solow model causes output per capita to Select) in the short nun in the long run the growth rate of the economy Sekect
