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Consider the table below, which shows the number of researchers in R&D (per million) in 2010 and the average growth rate of real GDP for the years 1985-2014. Explain how the Romer model explains the relationship between the number of researchers and economic growth. Given your answer, does the data below corroborate your story? How might you explain any inconsistencies between the data and the model?
Table 1
China Hungary South Korea Mexico
R&D 903 2,131 5, 380 340
Researchers
GDP Growth 6.9% 1.0% 5.7% 2.4%
(Source:)
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