Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In the Solow neo-classical growth model, and models that were derived from it, stable growth paths did not require a distributional function. - And subsequent
In the Solow neo-classical growth model, and models that were derived from it, stable growth paths did not require a distributional function. - And subsequent endogenous growth theories (Romer, 1986; Lucas, 1988) tend to generalize explanations of growth in terms of homogeneous "representative agents". - That is, that individuals are identical and have beliefs and expectations that are identical to the predictions of the model (rational agents). - Not generally supported empirically. More a tool for analytical thinking about complex economic problems. Emphasis on aggregate income growth (growth in GDP per capita) - reflects the growth rate of average income in an economy. - Will miss important questions about distribution: who gains from growth and whether the distribution of income itself affects the rate of growth of an economy
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