Exercise 19.22. * Consider the baseline AK model in Section 19.4. Suppose that production and allocation decisions within each country is made by a “country-specific social planner” (who maximizes the utility of the representative consumer within the country). (1) Show that the equilibrium in the text is no longer an equilibrium. Explain why. (2) Characterize the equilibrium in this case and show that all of the qualitative results derived in the text apply. In particular, provide generalizations of Propositions 19.11 and 19.12. (3) Show that world welfare is lower in this case than in the equilibrium in the text. Explain why. (4) Do you find the equilibrium in this exercise or the one in the text more plausible? Justify your answer.