(a) (7.5 marks) By and large, the evidence suggests that the ratio of GDP per worker in rich countries to that in poor c

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A 7 5 Marks By And Large The Evidence Suggests That The Ratio Of Gdp Per Worker In Rich Countries To That In Poor C 1 (131.59 KiB) Viewed 18 times

(a) (7.5 marks) By and large, the evidence suggests that the ratio of GDP per worker in rich countries to that in poor countries has remained fairly stable between 1960 and 2000. Discuss the extent to which this is consistent with the predictions of the Solow model. (b) (7.5 marks) Let h and k be a country's average human and physical capital per worker, respectively. Empirically, the ratio is negatively correlated with GDP per worker. Briefly explain what economic forces may drive such a pattern (in particular by establishing how h and k individually are correlated with GDP per worker).