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Having in n1ind'the Lecture on Economic lGrowth. Imagine that our per capita production function now is 3'}: = ATE: Assume there is no growth in
Having in n1ind'the Lecture on Economic lGrowth. Imagine that our per capita production function now is 3'}: = ATE: Assume there is no growth in A and zero population growth {1] = 0}, positive initial capital kn > U and SA ;> 6. (d) (6 pts) Suppose we have two countries, Drachma and Amestris, each with the same savings rate, s, same de- preciation rate o, and same level of technology, A. Suppose that Amestris has a higher initial level of per-capita capital stock, if their growth is defined by the above model what can you say about their relative growth rates? What does this imply about our standard conditional convergence result in the context of this model? Explain why we observe this difference mechanically
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