final hard professor 1

1 Savings and Growth Many households have been forced to reduce savings in response to the COVID-19 crisis. Using the growth model from class, consider the impacts on long-run growth from a reduction in the savings rate. Provide a graph that clearly illustrates the effects along with a brief discussion. Be sure to mention the effects on the long-run growth rate. 2 Growth Discrepencies Both China and India have averaged around 7% GDP growth rates over the last 5 years while the US and Japan have averaged around 2%. The population growth rates for the US and China and Japan are all under 1% (.5% for China, .8% for the US, and −.1% for Japan) while India’s is 1.2% (also relatively modest). Discuss these facts in the context of a Solow-Swan growth model, clearly explaining your reasoning. 3 Growth Model Suppose that output (Y ) in an economy is given by the following aggregate production function: Yt = Kt + Nt where Kt is capital and Nt is the population. Furthermore, assume that capital depreciates at rate δ and that savings is a constant proportion s of income. You may assume that δ > s. 1. Suppose that the population remains constant. Solve for the steady-state level of capital per worker. 2. Now suppose that the population grows at rate n. Solve for the steady-state level of capital per worker. 3. Based on your answer to part 2) above, solve for the steady-state growth rates (in terms of n) of the following: (a) capital per worker (b) output per worker (c) capital (d) output


Submit Your Assignment and get professional help from our qualified experts!

final hard professor 1 was first posted on July 27, 2020 at 4:31 am.
©2019 "Submit Your Assignment". Use of this feed is for personal non-commercial use only. If you are not reading this article in your feed reader, then the site is guilty of copyright infringement. Please contact me at

"Is this question part of your assignment? We Can Help!"

Essay Writing Service