pset2 - Econ 102 Macroeconomic Theory Winter 2007 Mark L.J....

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Econ 102 Mark L.J. Wright Macroeconomic Theory meanprofessor@hotmail.com Winter 2007 Bunche 9284 Problem Set 2: Growth and Development Date Due: Thursday 8th February, 2007 Problem 1 (Japan After World War II) Consider Japan in the aftermath of World War II. As a result of the bomb- ing, the capital stock has been dramatically reduced. For simplicity (it is certainly not realistic) we will assume that L and A remained the same. In the decades of the 1960’s, 70’s and 80’s, the Japanese economy grows much faster than the US economy. Many policy makers argued that this indicated that the Japanese economy was somehow “better” than the US economy, and argued that the US should adopt Japense economic policies. Imagine that you are appointed by the President of the US to investigate these proposals. Using the Solow-Swan model as a guide, what advice would you give the President? Problem 2 (The Solow-Swan Growth Model and Planned Obsoles- cence) Consider a country that is well described by the Solow-Swan growth model. Suppose that the nefarious owner of that countries largest computer maker
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This note was uploaded on 04/03/2009 for the course ECON 102 taught by Professor Serra during the Winter '08 term at UCLA.

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pset2 - Econ 102 Macroeconomic Theory Winter 2007 Mark L.J....

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