Analyze some Data about solow model with no technological

3. Solow Model with No Technological Change Let’s now modify the technology assumption used in the prior problem and assume that output in all countries (South and North) is produced according to the following constant-returns-to-scale production function that lies at the heart of the standard Solow growth model: A. Express the production function in per capita terms (i.e., derive an expression for y as a function of k). Assume we have the same values as in problem two for the following exogenous parameters: s = 0.15; n = 0.01; d = .03. B. What are the steady state levels of capital per worker and income per worker? Assume also that our two countries start with the same initial conditions as in problem two; namely, that L(0)=1 for both South and North and that K(0) = 100 in South and K(0) = 300 in North. C. On one graph plot the income per capita levels for the two countries over 200 years under NO exogenous technological change. Title this graph “Figure 3A”. D. On a separate graph, plot the income per-capita growth rates over 200 years for both countries. Title this graph “Figure 3B”. E. Does the model reach a steady state? F. Does South converge to North according to this model when both countries have the same savings rate? G. How and why are the implications of this model for South different from those in the Harrod--Domar model? Why can growth not be sustained? H. Suppose now that the populist leader raises savings rate in South to the levels that you identified in 2F above. What happens in both short and long terms to per-capita income levels and growth rates after the savings rate increases in South? Do South and North still converge? Why or why not?