Question
Compare the path of an economy's per capita output in both the Solow Model with exogenous technological change and the Ak model before and after
Compare the path of an economy's per capita output in both the Solow Model with exogenous technological change and the Ak model before and after the following changes. Assume that the prior to the change, the economy is on its balanced growth path. (Note: your answer should consist of a graph of the ln(yt) on the vertical axis, and time on the horizontal.
a. An increase in the population growth rate.
b. A decrease in the economy's savings rate
c. An increase in TFP
d. A earthquake that destroys half of the nation's capital stock but not its population
e. A disease that kills off half of the population.
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