In Solow model, we assumed that population growth rate is irrelevant to saving rate and technological progress. In this question, we will relax this assumption. Assume that population growth would reduce technological progress, what would happen to the steady state level of capital per capita? What if otherwise population growth increases technological progress? Explain mathematically and graphically.
In Solow model, we assumed that population growth rate is irrelevant to saving rate and technological progress. In this question, we will relax this assumption. Assume that population growth would reduce technological progress, what would happen to the steady state level of capital per capita? What if otherwise population growth increases technological progress? Explain mathematically and graphically.
Chapter16: Economic Growth
Section: Chapter Questions
Problem 3E
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In Solow model, we assumed that population growth rate is irrelevant to saving rate and technological progress. In this question, we will relax this assumption. Assume that population growth would reduce technological progress, what would happen to the steady state level of capital per capita? What if otherwise population growth increases technological progress? Explain mathematically and graphically.
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