Question
9. The main conceptual difference between the Romer model and the Solow model is a. The production function in Romer exhibits decreasing marginal returns with
9. The main conceptual difference between the Romer model and the Solow model is a. The production function in Romer exhibits decreasing marginal returns with respect to capital but Solow does not. b. The Romer model tries to explain how an economy can continue to grow year-after-year whereas the Solow model only has growth in the transition to steady state. c. The Solow model focusses on increasing returns to scale and the Romer model is focused on the steady state d. The Solow model is a model of growth in GDP per capita, but Romer is a model of growth in GDP per worker e. Both c. and d. are correct.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started