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On January 12th 2010 a devastating earthquake with a magnitude of 7.3 struck Haiti. As a result, about 40% of the capital stock of Haiti
On January 12th 2010 a devastating earthquake with a magnitude of 7.3 struck Haiti. As a result, about 40% of the capital stock of Haiti was destroyed. Assume the economy was at its steady state before the earthquake hit. Use the Solow Diagram to illustrate how the economy was impacted . Draw a graph showing how output evolves over time and explain what happens to the level and growth rate of per capita GDP.
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