lec 3 endegonous growth models

Question 1

what is the romer model

Answer 1

technological progress driven by
search for new ideas by researchers who profit from their
inventions —- a new idea
allows a given bundle of inputs to produce more or better
output

Question 2

what does romer try say

Answer 2

technological process is the main driver of economic growth

Question 3

why do we r and d

Answer 3

so induviduals can profit from the researchbenefitting society

Question 4

more people meansin endogenous models

Answer 4

more people, more researchers, more inventors more technological evolution

Question 5

what will achieve higher levels of researchincentive-

Answer 5

intellectual property rights and rewards for being sound - subsidys, grants all that jazz

Question 6

why do romer and solow differ

Answer 6

romer follows an endegenous model for understanding long term growth, understanding investment in human capital is key for long run growth — solow focuses on shorter term on how accumulation of capital and growth in the labor force, treating savings, tech as exogenous to its model.

Question 7

what does romer say about long run growth

Answer 7

indifferent to change in the investment rate. the amount of money invested or how many people are doing research rather built on people and their innovations

Question 8

what is the main understanding of solow in the long run

Answer 8

capital and workers have diminishing returns and the rate of growth is dependent on the increases in TFP or productivity and technological improvements

Question 9

what do exogenous models understand?

Answer 9

understand that savings and technological evolution is exogenous and taken as given. Focus on the idea that investment rates facilitate level of growthand that an efficient level of physical capital to population will lead to growth

Question 10

what do endegenous models understand

Answer 10

long run grwth is dependent on ideas, knowledge, research etc

Question 11

what did barro do

Answer 11

measure growth using initial income, capital, fertilkity, stability, price levels and govt interventions

Question 12

did barro find income convergence

Answer 12

y

Question 13

does human capital matter? barro

Answer 13

y alot for growth

Question 14

what are barro findings?

Answer 14

Income convergence does exist, if underlying predictors of
growth were accounted for
* Growth is positively related to human capital
* Growth is negatively related to government intervention into
economy, political instability
* This empirical research opened room for further theories of
growth and development

Question 15

kremer understood what

Answer 15

following romer, understands inventions are a public bonus and that those with larger populations should grow faster - relevant b4 1500 where knowledge exchange was less viable

Question 16

where would kremers model work

Answer 16

aztecs - americas - isolated regions up to 1500, the more tech means more health means more people means more tech etc

Question 17

conclusions of romer

Answer 17

tech improves by innovative
effort

Question 18

barro conc

Answer 18

Empirical research confirms income convergence conditional
on fundamental parameters being equal - key parameters are positive with human capital and negative with political stability

Question 19

In an endogenous growth model, the fraction of labour in the research
sector affects the steady-state how?

Answer 19

level of income - not growth rate or stock of knowledge

Question 20

According to Kremer’s “Population Growth and Technological
Change” theory, the main predictor of development i

Answer 20

geography and knowledge access - (isolation)