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The following table shows the investment rate and output per worker for two pairs of countries, assuming that a = 0.3 and A is the
The following table shows the investment rate and output per worker for two pairs of countries, assuming that a = 0.3 and A is the same in all countries. Calculate the actual and model-predicted (steady-state) relative output per worker for each country pair. How well does Solow's model forecast fail/succeed in predicting the relative incomes of country pairs? Country Investment rate Output per (average employee $2009 1974-2009) Thailand 35,2% 13 297 Bolivia 12,6% 8 202 b Japan 29,9% 57 929 New Zealand 18,6% 49 837
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