Why might the parameter z increase in an economy

Reference no: EM13181973

Suppose the economy is on a balanced growth path in the Romer model, and then, in the year 2030, research productivity rises permanently to z? > z.

a) Solve for the new growth rate of knowledge and yt

b) Make a graph of yt over time (on a ratio scale).

c) Why might the parameter z increase in an economy?

Reference no: EM13181973

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