#solowmodel

1. Let's assume that we have not reached the steady-state in the Solow model (before the steady-state).

a) If population grows permanently but the population growth rate is steady, discuss the effect on per capita income in the steady-state.

b) If population growth rate increases permanently, discuss the effect on the economic growth rate and per capita income BEFORE the steady-state.

2. In the Solow model, it assumes that the technological growth rate is steady.

a) The technological growth rate has to be the same between countries. But if it is not the same, what problem occurs?

b) Discuss why the technological growth rate between countries can be the same.