Suppose the economy is on a balanced growth path in the Romer model, and then, in the year 2030, ̄l (lower case L bar) decreasesimmediately and permanently to the new level ̄l′ (lower case L bar one). (a) Solve for the new growth rate of knowledge and yt. (b) Make a graph of yt over time using a ratio scale

Suppose the economy is on a balanced growth path in the Romer model, and then, in the year 2030, ̄l (lower case L bar) decreasesimmediately and permanently to the new level ̄l′ (lower case L bar one). (a) Solve for the new growth rate of knowledge and yt. (b) Make a graph of yt over time using a ratio scale

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions

Section: Chapter Questions

Problem 3QP

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