Details of this Paper

ECO - Consider 2 countries, Avataria and Twilightia, which can be described by the Solow model

Description

solution


Question

Question;Consider 2 countries, Avataria and Twilightia, which can be described by the Solow model. Avataria has a capital-labor ratio that is initially twice as big as that of Twilightia, but neither country is yet in a steady state. Both countries have the same production function,Y(K,L)=4(K)^{1/2}(L)^{1/2}Avataria has a 20% investment rate and 16% depreciation rate, while Twilightia has a 15% investment rate and 12% depreciation rate.What are the output growth rates of these countries in the long run?

 

Paper#56455 | Written in 18-Jul-2015

Price : $24
SiteLock