Assignment Help-In the US, real GDP growth over the long run has slowed from about 3% to 2% per year. How would the Solow model explain this?
In a Solow growth model suppose the production function is y = square root of k, where y = Y/L and k = K/L. If the economy saves 15% of its income and 5% is the rate of capital depreciation, find the steady state living standard. If the saving rate increases to 30%, what happens to the living standard?
Redo problem number 1, but assume that population and the labor force each grow 2.5% per year.
