1. Countries with the same set of parameters (s; d; n; z) will converge to the same steady state equilibrium. During the transition towards the steady state equilibrium, the poor countries tend to grow faster to catch-up with the richer countries. No, it is not consistent with the data. Barriers prevent poor countries from adopting the technologies used by the richest countries of the world. This supports the idea that growth miracles such as the ones in East Asia have not occurred in the rich countries 2. It is consistent with the evidence of the richest countries of the world in 1960 as having access to roughly the same technology. Due to this, it was expected convergence in standards of living among them with minor differences accounted for by differences in population growth and savings rates. The tendency for poor countries can be explained by the barriers to technology adoption 3. • Laws that make it easy for labour unions to organize and give them greater power in bargaining with firms so they can block the introduction of new technologies.
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This note was uploaded on 01/08/2012 for the course ECON 2400 taught by Professor Tasso during the Spring '09 term at York University.