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ECON 200 Problem Set 5 Fall 2007

# ECON 200 Problem Set 5 Fall 2007 - Economics 200...

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Economics 200 Macroeconomic Theory Problem Set 5 Due at the beginning of class on October 23, 2007. Our study of economic growth so far has taken the rate of population growth, , as a given 8 constant. There is a tendency, however, for “fertility” and hence the rate of population growth to decline as incomes rise. To model this tendency we can let be a function of and write 1 8 5 8Ð5Ñ with . An example of such a function is shown below. .8Ð5Ñ .5  ! 2 With this modification, the equation for the rate of growth of in the Solow model (without 5 technological progress) becomes so that the steady state value(s) of # \$ 5 0Ð5Ñ 5 œ =  Ò8Ð5Ñ  Ó 5 are those 's solving . When is as shown above the diagram for finding 5 = œ 8Ð5 Ñ  8Ð5Ñ

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ECON 200 Problem Set 5 Fall 2007 - Economics 200...

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