Calculate the ratio of the steady- state levels of income

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Two countries, X and Y, satisfy the Solow model with α = 1/3 and productivity A=1. In Country X, investment is 54% of GDP and the population grows at 1% per year. In Country Y, investment is 8% of GDP, and the population grows at 3% per year. In both countries, the rate of depreciation, δ, is 5%. Use the Solow model to calculate the ratio of the steady- state levels of income per capita.

Reference no: EM131009735

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