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What are the ‘Lessons’ of the Specific Factor Model? Demonstrate this lesson using formal modeling (either graphs or equations).
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- Do you agree that most economic phenomena can be explain using regression analysis?What is centeris paribus assumptionsModern economic models sometimes require strong assumptions. What do you think are some of the trade-offs between a more rigorous, logically cohesive model with strong assumptions but clear inferences and a description of problems followed by a verbal discussion of possible implications?
- Define the concept of economic modelsTowards the end of the 16th century the potato (originated in South America) was brought to Europe. Within a short time period it became the prime agricultural crop in Ireland. The population of Ireland was about 1.4 million in 1600 and increased to about 8.4 million by 1841. The Irish economy was in a Malthusian state throughout this period. According to the Malthusian model, (a) What should have been the increase in productivity due to the introduction of potatoes so as to generate (alone) a 6-fold increase in population? (b) Draw the phase diagram that describes the evolution of population from one steady-state to another. (c) What should we expect the level of income per capita to be in 1841 relative to the level in 1600?What are the assumptions of say's law
- Give an economic relationship in which individual effect of independent variables are difficult to separate in the presence of multicollinearity.Why researchers use so many theoretical model to do their research, such as regression model, empirical model etc??QUESTION 2 Consider the Romer model of ideas seen in lectures. Ideas are accumulated following AA = OLA, with e = OL^-'Aº. Assume that A = 1. In this case an increase in the number of researchers LA increases the rate at which each researcher finds a new idea o an increase in the number of researchers La lowers the rate at which each researcher finds a new idea an increase in the number of researchers LA has no effect on the rate at which each researcher finds a new idea O None of the above