Question 5. (20 points) Empirical evidence has highlighted noticeable income convergence across difference regions in the US. It has been discussed in many classical studies, including Barro and SalaiMartin (1991). However, researchers also noticed some different pattern in reality. For example, there are two cities in central Arkansas. They are 40 miles apart from each other next to an inter-state highway. The two cities were similar in several aspects, for example infrastructure, demographics and industries until the 19805. For example, both cities had about 5,000 total population and roughly $10,000 of average household income in the mid-19705. After 40 years, one city still has about 5,000 people and with $28,000 average household income. The other city, however, has grown into a decent metro-area with about 30,000 residents and $50,000 average household income. 0 Reference: Barro, R. and Sala-iMartin, X., 1991. Convergence across States and Regions. Brookings Papers on Economic Activity, 22(1), pp.107-182. (1) Could you explain the change of the two cities from the a respective of long-run economic growth? You can present your answer intuitively (in your own words) or graphically. (2) From the story above, can you nd any evidence to support or invalidate the Solow growth model, which is the core of modern economic growth theory