(a) Consider the Solow model. Show that savings rates and depreciation rates have only level effects on...
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(a) Consider the Solow model. Show that savings rates and depreciation rates have only level effects on both per capita income and total income. What about the effect of population growth on per capita income?
(b) Recall the Harrod–Domar model. What kind of effect do the same parameters have on income in that model?
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a Solow Model Level effects of savings rate and depreciation rate In the Solow modelboth savings rate s and depreciation rate affect the steadystate level of capital per worker kwhich in turn determin...View the full answer
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