Growth Rates & Time to Double (Rule of 70)




Solutions
Part A - Growth Rates & Time to Double (Rule of 70)
Part B - Returns to Scale - Constant or Not?
Part C - Solow Growth Model - Solving for Steady State
Part D - Plugging in Numbers
Part E - Using the Solow Model and Diagram


(a) very similar to T/F problem 3 above - rules at the top of page 54 (of Jones Macro Econ Crisis Update Ed), and be able to apply them in the example on page 54-55

Given the production function


Part 1, Growth Rate of Y.
You can rewrite the production function in terms of growth rates – and the problem is asking for
.

                  



Part 2, Time to Double
Time to double? Use the rule of 70

     
So, by my maths, at 4% growth it takes about 17 to 18 years to double the size of this economy (for income to double).





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