Assume that the two countries have labor forces of equal size. a. Using this function, solve for

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Assume that the two countries have labor forces of equal size.

a. Using this function, solve for the steady-state ratio of technology in the leading country to technology in the follower country (i.e., A1/A2) as a function of the values of gA in the two countries. Show how this depends on the value of

b, and explain what is going on.

b. Assume that b = 1/2, mi = 10, gA,1 = 0.2, and gA,2 = 0.1. Calculate the steady-state ratio of technology in Country 1 to technology in Country 2.

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Economic Growth

ISBN: 9780273769293

3rd Edition

Authors: David N Weil

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