Suppose that the privatization of the social security system raises the savings rate (and, hopefully, the investment rate) in the U.S. Explain the impact on per capita income growth in the US. Will long run growth be affected?
(Here, I am just looking for the impact of a rise in the investment rate on growth in the economy)
4) During World War II, many countries (most notably Germany and Japan) lost substantial portions of their capital stock while the U.S. emerged relatively unharmed. Explain the impact of the war on the level and growth of income in Germany and Japan.
(Assume Germany and Japan also lost portions of their population due to war casualties. You can ignore the population loss to simplify the answer....the loss of life was actually very small relative to the loss in capital anyway.)