Econ, macro, development economics
kshaatI need an answer in 8 hrs please!
a) Consider the basic Solow model. If workers consume all their income and if capitalists save all their income, is it more likely to produce the Golden Rule Steady State in this model?
(b) Keeping in mind the conventional idea that since (rich) capitalists mostly save and invest, an income distribution biased in favor of the rich may increase investment and help the country in the long run. Is this "trickle-down" theory correct for the poor countries?
(c) Comment on the possible reasons for the shape of the Kuznet’s curve.
(d) What are the insights from the Harrod-Domar-Solow-Romer as well as the Lewis-Piketty models in regard to income distribution? Is a country better off addressing the issue of income distribution in the early stages of its growth?
(e) Conclude your essay with your policy prescriptions: if you claim that income distribution is an important factor in development, suggest specifically what can be done to have the maximum effect on development. If you think that income distribution is not an important factor, explain why and suggest policies that may help the development process.
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