Economic growth and economic development 226

Introduction to Modern Economic Growth
Exercise 4.2. Derive equation (4.7). Explain how the behavior implied for technology by this equation differs from (4.4). Why is this? Do you find the assumptions
leading to (4.4) or to (4.7) more plausible?
Exercise 4.3.

(1) Show that the models leading to both (4.4) or to (4.7) imply

a constant income per capita throughout.
(2) Modify equation (4.2) to
L (t) = φY (t)β ,
for some β ∈ (0, 1). Justify this equation and derive the law of motion

technology and income per capita under the two scenarios considered in
the text. Are the implications of this model more reasonable than those
considered in the text?
Exercise 4.4. In his paper “Tropical Underdevelopment”, Jeff Sachs notes that
differences in income per capita between tropical and temperate zones have widened

over the past 150 years. He interprets this pattern as evidence indicating that the
“geographical burden” of the tropical areas has been getting worse over the process of
recent development. Discuss this thesis. If you wish, offer alternative explanations.
How would you go about testing different approaches? (If possible, suggest original
ways, rather than approaches that were already tried).

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