Calculate the population growth and saving behavior for south Korea and south Africa in the year 2000.
The solow model and relative country perfomance: Consider the real world data for South Korea and South Africa for the year 2000. Captital/Workers (K/N) and GDP/Worker (Y/N) are expressed in 2000 dollars.
| |
Pop. Growth |
Savings Rate |
Capital/Worker |
GDP/Worker |
| |
n |
s |
k |
y |
| SK |
.0106 |
.325 |
91495 |
33202 |
| SA |
.01675 |
.1796 |
22704 |
20315 |
1.Complete the relative GDP/worker of South Korea to South Africa (ysk/ysk). Who is richer? How many times?
2.Compare the relative GDP/Worker of South Korea to South Africa (ysk/ysa). Who is richer? How many times?
3.Assuming that the depreciation rate, d = .05 and the share in the Cobb-Douglass production function, Θ=.35 is the same for countries. what will happen to their relative output per worker in the long run? Will South Africa catch up?
4. Explain how much of the difference is accounted for by the population growth rate and how much is due to a different saving behavior?