Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with the questions. Thank you 3. Quarantine and Economic Growth: Let's consider the effect of removing non-essential workers from the labour force

Please help me with the questions. Thank you

image text in transcribed
3. Quarantine and Economic Growth: Let's consider the effect of removing non-essential workers from the labour force on economic growth during a quarantine. Consider the following modication to the model of endogenous growth: m) = (laLMttlELt!) Au) BlaLEL(t)]"'A(t)9 where E is a parameter between zero and one that measures the proportion of the available workforce that is deemed (E)ssential and can continue to work during the quarantine. (a) How does the value of E affect. output per worlner (y = Y/L)? Derive an expression for y. If E falls, what happens to y? (3 points) (b) Find the balanced growth path value of 95.1, i.e. 93, for this model. Dom it depend on E? Show your work. (2 points) (c) Draw a graph of the log of y over time that shows the impact of a fall in E. Explain. (Hint: Think about the transitions dynamics in this models) (3 points) ((1) If the number of people working on research and development of a vaccine for COVID- 19 increase: (cu 11'), can we get faster growth in A in the short run? What about in the long run? (2 points)

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_2

Step: 3

blur-text-image_3

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