Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Grandpa Frank used to say, Out of the ashes of destruction have risen the wings of opportunity. We'll use the following questions to see if

Grandpa Frank used to say, "Out of the ashes of destruction have risen the wings of opportunity."

We'll use the following questions to see if we agree with this statement:

  1. First let's think theoretically about the model. (I.e., without referencing the details of the spreadsheet.) Think about the growth in capital-labor ratio in France. Given that France suffered a large drop in capital-labor ratio during WWII, what does the Solow model say about what growth should be in the 1950s? (I.e., fast? slow? can't tell?) What should happen to that growth rate over time and why? Would you expect the growth in France in the 1950s to be sustained forever? Why or why not?
  2. If France had not suffered a large drop in its capital-labor ratio during the war, what would we expect to see about its growth rate? Why? What does this tell you about the main reason for such strong growth rates in the years right after the war?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Reporting And Analysis

Authors: Lawrence Revsine, Daniel Collins

5th Edition

0078110866, 978-0078110863

More Books

Students also viewed these Economics questions

Question

1. What will happen in the future

Answered: 1 week ago

Question

3. Avoid making mistakes when reaching our goals

Answered: 1 week ago