Part I - Creixement a llarg termini: el model de… · Introducció a la Macroeconomia UPF 2021

q. In the Solow model with population growth $g_n$ and no technological progress ($g_A = 0$), an increase in $g_n$:

Solución: 1. Reduces the steady-state capital per worker and increases the long-run growth rate of aggregate capital.

r. A policymaker asserts that the only mechanism to sustain a higher long-run growth rate of output per capita is to increase the rate of technological progress. As an economist, you:

Solución: 3. Agree, because the steady-state growth rate of output per person is determined entirely by the rate of labor-augmenting technological change.

s. Consider a nation initially resting in its Solow steady state. A severe earthquake destroys a significant share of the physical capital stock without causing any loss of human life. In the aftermath of this disaster, the economy will:

Solución: 4. Temporarily exhibit a faster rate of output growth as it transitions back to the steady state.

t. Two countries are identical in all structural parameters except that Country 1 has a higher saving rate than Country 2. In the Solow steady state, Country 1 will have a ________ level of total output and a ________ rate of growth of output per worker compared to Country 2.

Solución: 2. higher; same