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Solow model predictsY/LandK/Lgrow at same rate (g), so thatK/Yshould be constant. Thisis true in the real world. Solow model predicts real wage grows at same rate asY/L, while realrental price is constant. Also true in the real world.CONVERGENCESolow model predicts that, other things equal, “poor” countries (with lower Y/L and K/L) shouldgrow faster than “rich” ones. If true, then the income gap between rich & poor countries wouldshrink over time, and living standards “converge.” In real world, many poor countries do NOTgrow faster than rich ones. Does this mean the Solow model fails? No, because “otherthings” aren’t equal. In samples of countries with similar savings & population growth rates,income gaps shrink about 2% / year. In larger samples, if one controls for differences insaving, population growth, and human capital, incomes converge by about 2%/year.