Solutions Manual for "Introduction to Modern Economic Growth"

Michael Peters and Alp Simsek are graduate students in economics at Massachusetts Institute of Technology.

• Introduction ix Chapter 2: The Solow Growth Model 1 Exercise 2.11 1 Exercise 2.14* 5 Exercise 2.17 7 Exercise 2.18* 10 Exercise 2.19* 11 Exercise 2.20 12 Exercise 2.23 14 Exercise 2.27 17 Chapter 3: The Solow Model and the Data 21 Exercise 3.1 21 Exercise 3.9 23 Chapter 4: Fundamental Determinants of Differences in Economic Performance 25 Exercise 4.3 25 Chapter 5: Foundations of Neoclassical Growth 27 Exercise 5.9 27 Exercise 5.11 29 Exercise 5.12 30 Exercise 5.14* 36 Chapter 6: Infinite-Horizon Optimization and Dynamic Programming 39 Exercise 6.2* 39 Exercise 6.8 39 Exercise 6.9 43 Chapter 7: An Introduction to the Theory of Optimal Control 45 Exercise 7.1 45 Exercise 7.10 47 Exercise 7.17* 47 Exercise 7.18 48 Exercise 7.21 50 Exercise 7.24* 51 Exercise 7.25 55 Exercise 7.28 56 Chapter 8: The Neoclassical Growth Model 63 Exercise 8.2 63 Exercise 8.11 64 Exercise 8.15 66 Exercise 8.19 68 Exercise 8.23 69 Exercise 8.27 73 Exercise 8.31 76 Exercise 8.33 81 Chapter 9: Growth with Overlapping Generations 87 Exercise 9.1 87 Exercise 9.6 88 Exercise 9.7 90 Exercise 9.15 93 Exercise 9.16 95 Exercise 9.17 100 Exercise 9.21 101 Exercise 9.24* 102 Exercise 9.32* 104 Chapter 10: Human Capital and Economic Growth 107 Exercise 10.2 107 Exercise 10.6 109 Exercise 10.7 113 Chapter 11: First-Generation Models of Endogenous Growth 119 Exercise 11.4 119 Exercise 11.14 125 Exercise 11.17 129 Exercise 11.18 130 Chapter 12: Modeling Technological Change 131 Exercise 12.2 131 Exercise 12.11 132 Exercise 12.13 134 Chapter 13: Expanding Variety Models 139 Exercise 13.1 139 Exercise 13.6 141 Exercise 13.7 142 Exercise 13.13* 144 Exercise 13.15 148 Exercise 13.19 150 Exercise 13.22 159 Chapter 14: Models of Schumpeterian Growth 163 Exercise 14.2 163 Exercise 14.7* 164 Exercise 14.13 167 Exercise 14.15 171 Exercise 14.18 179 Exercise 14.21* 182 Exercise 14.26 186 Chapter 15: Directed Technological Change 197 Exercise 15.6 197 Exercise 15.18 201 Exercise 15.19 212 Exercise 15.24* 216 Exercise 15.27 218 Chapter 16: Stochastic Dynamic Programming 223 Exercise 16.4* 223 Exercise 16.8 224 Exercise 16.10 224 Exercise 16.11* 225 Exercise 16.12 231 Exercise 16.14 233 Chapter 17: Stochastic Growth Models 237 Exercise 17.13 237 Exercise 17.18 240 Exercise 17.30 * 243 Chapter 18: Diffusion of Technology 249 Exercise 18.8 249 Exercise 18.13* 254 Exercise 18.16* 258 Exercise 18.21 260 Chapter 19: Trade and Growth 263 Exercise 19.2* 263 Exercise 19.3 266 Exercise 19.4* 268 Exercise 19.11* 270 Exercise 19.25* 273 Exercise 19.26 * 274 Exercise 19.27 * 279 Exercise 19.28 284 Exercise 19.29 285 Exercise 19.33 289 Chapter 20: Structural Change and Economic Growth 293 Exercise 20.3 293 Exercise 20.5 294 Exercise 20.6 296 Exercise 20.8 296 Exercise 20.9* 299 Exercise 20.17 299 Exercise 20.19* 305 Chapter 21: Structural Transformations and Market Failures in Development 309 Exercise 21.1 309 Exercise 21.6 311 Exercise 21.12 315 Chapter 22: Institutions, Political Economy and Growth 323 Exercise 22.2 323 Exercise 22.3 326 Exercise 22.8 328 Exercise 22.16 329 Exercise 22.17 335 Exercise 22.22* 338 Exercise 22.27 343 Chapter 23: Institutions, Political Economy and Growth 351 Exercise 23.12 351 References 361