ECON 413
Assignment #2
Due: 2:45pm February 8, 2016
Instructions: Assignments are due in class and at the beginning of class on the date indicated.
You may work in groups of 1, 2 or 3. The assignment submitted must include the names of all
students in the
Chapter 3
Solutions to Exercises
1. marts 2010
Exercise 3.1: The elasticity of substitution between capital and labour and
the income distribution
1. The marginal rate of substitution between capital and labour is given by the ratio
of the marginal produc
5.7 Exercises
149
higher level of steady state income and consumption. The general Solow model implies
the same golden savings rule as the basic Solow model: long-run consumption per
capita will be maximized when the savings rate equals the capital income
84
Chapter 3 Capital accumulation and growth
6. Economics has much more to say about the sources of prosperity and growth than what
can be inferred from the basic Solow model. For instance, human capital (the education
and training embodied in people),
Chapter 5
Solutions to Exercises
1. marts 2010
Exercise 5.1. The general Solow model in continuous time
1. Taking logs on both sides of k = K/(AL) and dierentiating wrt. time gives:
K L A
k
.
=
K L A
k
Inserting sY K for K, and n for L/L, and g for A/A g
6.6 Exercises
183
state the country was initially, and for the speed by which the country converges to
steady state. The rate of convergence depends in a simple way on model parameters
and (ceteris paribus) it is smaller for the Solow model with human cap
ECON 413
Assignment #1
Due: 2:45pm February 1, 2016
Instructions: Assignments are due in class and at the beginning of class on the date indicated.
You may work in groups of 1, 2 or 3. The assignment submitted must include the names of all
students in the
ECON 413
Assignment #3
Due: 2:45pm March 30, 2016
Instructions: Assignments are due in class and at the beginning of class on the date indicated.
You may work in groups of 1, 2 or 3. The assignment submitted must include the names of all
students in the g
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SOLUTIONS CHAP 3 WEIL 2nd ed
2. In the steady state, the growth rate of capital must be zero because investment in
capital is exactly offset by depreciation in capital. (Note: there is no population growth
here). If we let the investment rate be given by
SOLUTIONS CHAP 4
1. As seen in chapter one, the formula is
(
g=
Xt+n
Xt
) n1
(
1=
6400000000
2
1
) 100000
1 = 0.000218888 = 0.0218%.
2. The graphs accompanying this answer are in the le solutions_graph_chap4b.pdf.
2.a) The initial equilibrium is at point
The Role of Technologyin Growth
l. (a) Nonrivai.
Noncxclud$le,
Onet co.sndprio.ofNatiodalDefense,loes
nor
dininish dothefs consmption ofNalion.t Defense,md within a givencouniry.s
bordes,il is dimcdl b selectivetycxcludeorheNfiom consuningNalionatDetense.
SOLUTIONS CHAPTER 6
HUMAN CAPITAL
6.1 Eects of the invention of a vaccine against malaria. (See
accompanying g 6.1 in solutions-graphs-chap6.pdf.)
As we have seen, the causal link between health and income goes
both ways. Curve h(y) denotes the positive e