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Suppose that Japan and Australia, which both use the same production technology (f(k)), are at steady-states with almost identical levels of capital per worker -
Suppose that Japan and Australia, which both use the same production technology (f(k)), are at steady-states with almost identical levels of capital per worker - k* (in other words, they have "converged"). There are, however, two important differences between these two economies: (i) Japan has a much lower population growth rate (n) and (ii) the climate in Australia results in capital depreciating much more quickly (). Please discuss how it is possible for these two countries to converge despite these differences, using the appropriate graph
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