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Comparative statics in Solow's Model
Explain how the following events affect output, capital and consumption per unit of labor in the long run and along the transition according to Solow's Model:
a) The destruction of 30% of the capital stock because of a natural disaster.
b) A permanent increase in the immigration rate.
c) A permanent increase in the labor market participation rate.
d) A permanent increase in the depreciation rate.
e) A temporal increase in the savings rate.
f) A permanent increase in the savings rate.
The value of the action The cost of the action The difference between the benefit and the cost of the action
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