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An increase in the initial stock of knowledge: Suppose we have two economies- let's call them Earth and Mars-that are identical, except that one

 

An increase in the initial stock of knowledge: Suppose we have two economies- let's call them Earth and Mars-that are identical, except that one begins with a stock of ideas that is twice as large as the other: A Earth = 2 x A Mars The two 00 economies are so far apart that they don't share ideas, and each evolves as a sepa- rate Romer economy. On a single graph (with a ratio scale), plot the behavior of per capita GDP on Earth and Mars over time. What is the effect of starting out with more knowledge?

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