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Yt=Kt^ L(1). Consider two imaginary countries, indexed A and B. Each economy can be characterised by the model above, but the population is constant in

Yt=Kt^ L(1).

Consider two imaginary countries, indexed

A and B. Each economy can be characterised by

the model above, but the population is constant in both economies. In the steady state, GDP

per worker in country A is 1.44 times that of country B

and the ratio of physical investment to

output is 0.3 in country A

and 0.25 in country B. The rate of depreciation is the same in both

countries. What must

be in order for the model to fit these facts?

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