## Unlock your academic success with our professional essay writing services today!

Coursepivot has top writers to help with your assignments

# Differences in the growth rates of knowledge, capital and output per worker

Question:
Consider the following model combining the Solow model and the Romer model:

?? = ???? ????1−?

Δ??+1 = ?̅?????

??? + ??? = ?̅

??? = ? ̅?̅̅

a) Assume initially that ? = 0, ?0 = 1 , ? ̅= 0.02, ?̅= 0.00001, ?̅ = 10,000, the depreciation rate ?̅= 0.1 , ?̅=0, ?0 = 500,000.

What type of model is that?

Find the growth rate of knowledge in the economy.

Find the growth rate of output per person.

Find the growth rate of consumption per person.

b) Now assume that ? = 0.3, ?0 = 1 , ? ̅= 0.02, ?̅= 0.00001, ?̅ = 10,000, the depreciation rate ?̅= 0.1 , ?̅=0.3, ?0 = 500,000.

Using Excel or the similar software find the values of ?? , ?? , output per person ?? and consumption per person in periods 1, 5, 10, 20, 50, 100 and 200.

What are the growth rates of these variables from period 0 to period 1, from period 4 to period 5, from period 9 to period 10, from period 19 to period 20, from period 49 to period 50, from period 99 to period 100 and from period 199 to period 200?

Plot output per person from period 0 to period 200 on a graph.

c) Now assume that parameter values are the same as in b) except for the investment rate which is now ?̅=0.4.

Based on the model what would be your predictions about the growth rate of knowledge and growth rate of capital in each period compared to the situation in part b)? Explain.

Now Using Excel or the similar software find the values of ?? , ?? , output per person ?? and consumption per person in periods 1, 5, 10, 20, 50, 100 and 200. What are the growth rates of these variables from period 0 to period 1, from period 4 to period 5, from period 9 to period 10, from period 19 to period 20, from period 49 to period 50, from period 99 to period 100 and from period 199 to period 200?

How these values compare with those in part b)? Are you surprised by any of the results? Explain.

d) Compare two economies: one with parameter values as in b) and the other one with the same parameter values except for the initial set of knowledge ?0 = 5.

Briefly explain what will be the differences in the growth rates of knowledge, capital and output per worker?

e) The government believes that the growth rate of output per worker is low and thinks about the measures that would increase it. There are two options available: (i) increasing the share of workers employed in the research sector and (b) increasing the investment rate. The government can choose only one option. Which option would you recommend and why?

### How to Order a Custom Paper on Coursepivot in Three Simple Steps

• Whether you are a new user or a returning customer, you can easily create an account or log in to your existing one, enabling you to enjoy the benefits of our website and its features.

### Step 2: Fill out the order form with your requirements

• Once you are logged in, navigate to the order form page to start filling in the details of your order.
• If you need any assistance during this process, our support team is readily available to help. Simply send an inquiry to our support team, and they will promptly respond to address your concerns and provide guidance.
• On the order form page, you will be prompted to enter your question's title, description, and category. This information helps us understand the scope of your essay and ensure that we assign the most suitable writer for your task.
• Additionally, you will be asked to select the deadline, paper format, line spacing, and total budget for your order. These choices enable us to deliver a custom-written essay that meets your specific requirements.
• Once you have filled in all the necessary details, click the 'submit' button to proceed to the next step.

### Step 3: Wait for order delivery and review your paper

• After you have submitted your order, our support team will promptly match it with the best writer available, considering their expertise in the relevant subject area.
• The assigned writer will then begin working on your essay, ensuring thorough research, high-quality writing, and adherence to your specifications.
• Once the writer has completed the essay, it will undergo a comprehensive review by our quality team to ensure its accuracy, coherence, and overall excellence. The finalized paper will be delivered to you via email before the agreed-upon deadline, allowing you sufficient time for review.
• Upon receiving the paper, you have the option to accept it and rate your writer based on your satisfaction. If you feel any revisions are necessary, you can request them at any time until you are fully content with the delivered work.
• Our dedicated support team is always available to address any concerns or modifications you may require.
• By following this three-step process, you can easily submit an order on our essay writing website, CoursePivot.com, and receive a high-quality, customized essay that meets your academic needs.

## Homework help and research paper assistance

Order custom essays from top writers today and get a professional paper delivered to your email on time. Coursepivot has top tutors and writers at your service.