solow growth model

Question 1

effects of capital on output

Answer 1

Higher capital per effective worker leads to higher output per effective worker.

Question 2

required investment

Question 3

required investment

Answer 3

the investment needed to maintain a
constant level of capital.

Question 4

Patents

Answer 4

give a firm that has discovered a new product the right to exclude anyone else from the production or use of the new prod- uct for some time.

Question 5

property rights

Question 6

fertility of research

Answer 6

how spending on R&D translates into new ideas and new products

Question 7

appropriability

Answer 7

extent to which firms can benefit from the results of their own R&D.

Question 8

growth rate of pop

Answer 8

gN

Question 9

growth rate of tech

Answer 9

gA

Question 10

GROWTH RATE OF EFFECTIVE LABOUR

Answer 10

gA + gN

Question 11

INVESTMENT SAVING

Answer 11

I=S

Question 12

RELATION 2

Answer 12

S=sY

Question 13

RELATION 3

Answer 13

It=sYt
s=private saving rate (constant)

Question 14

Flows

Answer 14

variables that have a time dimension (that is, they are defined per unit of time); Output, saving, and investment are flows.

Question 15

stocks

Answer 15

stocks are vari­ables that do not have a time dimension (they are defined at a point in time). Employment and capi­tal are stocks.

Answer 16

Kt+1 = (1-o)Kt + It
Kt+1 =
o= rate of depreciation
Kt =
I=investment

Question 17

required investment

Question 18

why is the amount of r&d spending important for growth?

Question 19

How do the appropriability and fertility of research affect the amount of R&D spending?

Question 20

Where does technological progress come from for the economic leaders of the world?

Question 21

Do developing countries have other alternatives to the sources of technological progress you mentioned in part (a)?

Question 22

Examples of developing countries shows that strong laws on intellectual property rights may have positive effects on the development of a country. Explain.

Question 23

assess the likely impact on the growth rate and the level of output over the next five years and over the next five decades.
a. A permanent reduction in the rate of technological progress.