Macro Module 4 HW

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NEAS	NEAS posted 14 Years Ago #9288 #
Supreme Being Group: Administrators Posts: 4.5K, Visits: 1.6K	Macroeconomics, Module 4: “Working with the Solow Growth Model” (Chapter 4) Homework Assignment: Convergence (The attached PDF file has better formatting.) Updated: November 14, 2007 Absolute convergence among countries does not occur for many reasons, two of which are discussed in this homework assignment. Equation 4.1 says that (∂k)/k = s × (y/k) – s × ä – n A. The savings rate in poor countries is low, because people need all their income to buy food and clothing and pay for shelter. In rich countries, the savings rate is high, since the average income covers more than needed for basic necessities. If the savings rate s is positively correlated with output per capita, will convergence be more or less rapid than if the savings rate is uncorrelated with output per capita? B. The population growth rate in rich countries is often low. The reasons are debated (more access to contraception, secular cultures, no need for children to contribute to household work, desires by young adults for other goals besides building families. If the population growth rate n is negatively correlated with output per capita, will convergence be more or less rapid than if the population growth rate is uncorrelated with output per capita? For each part of this homework assignment, give a one sentence intuitive explanation of What savings pays for. The capital costs of population growth. Barro states the intuitive argument in the textbook. See the last paragraph on page 85 (savings rate) and last paragraph on page 86 (population growth rate). Attachments Macro Mod 4 HW.pdf (1.9K views, 45.00 KB) 0
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anna_0416	anna_0416 posted 13 Years Ago #10913 #
Forum Newbie Group: Forum Members Posts: 1, Visits: 1	Dear Administrator, In Home Work 4 : 1. We can skip parts A and B regarding questions related to rates of convergence.(Yes/No) 2. Effectively we have to anwer the following questions for HW 4 instead: a. What savings pay for when savings rate is positively correlated to output per capita b. What savings pay for when population growth rate is negatively correlated to output per capita c. The capital costs of population growth when savings rate is positively correlated to output per capita d. The capital costs of population growth when population growth rate is negatively correlated to output per capita By output per capita you mean real GDP per person right? You have asked us to look at 2 particluar paragraphs for intuitive arguments. The last paragraph of Pg 85 deals with how much advanced countries spend on R&D and last paragraph of Pg 86 deals with free rides availed by other countries because of the role of U.S. in the market for prescription drugs. Is that what the last paragraphs of Pg 85 and Pg 86 deal with, please confirm. Thank you so much. [NEAS: Yes. The homework assignment shows if you have read the chapter; you comments indicate that you have read and understood it.] 0
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NEAS	NEAS posted 6 Years Ago #16097 #
Supreme Being Group: Administrators Posts: 4.5K, Visits: 1.6K	+x NEAS - 5/12/2010 12:14:08 PM Macroeconomics, Module 4: “Working with the Solow Growth Model” (Chapter 4) Homework Assignment: Convergence (The attached PDF file has better formatting.) Updated: November 14, 2007 Absolute convergence among countries does not occur for many reasons, two of which are discussed in this homework assignment. Equation 4.1 says that (∂k)/k = s × (y/k) – s × ä – n A. The savings rate in poor countries is low, because people need all their income to buy food and clothing and pay for shelter. In rich countries, the savings rate is high, since the average income covers more than needed for basic necessities. If the savings rate s is positively correlated with output per capita, will convergence be more or less rapid than if the savings rate is uncorrelated with output per capita? B. The population growth rate in rich countries is often low. The reasons are debated (more access to contraception, secular cultures, no need for children to contribute to household work, desires by young adults for other goals besides building families. If the population growth rate n is negatively correlated with output per capita, will convergence be more or less rapid than if the population growth rate is uncorrelated with output per capita? For each part of this homework assignment, give a one sentence intuitive explanation of What savings pays for. The capital costs of population growth. Barro states the intuitive argument in the textbook. See the last paragraph on page 85 (savings rate) and last paragraph on page 86 (population growth rate). 0
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