In the Romer model, output is increasing in the ________ and decreasing in the ________.

Question

Quizplus · Accepted Answer

In the Romer model, output is positively related to the growth rate of knowledge because knowledge drives technological progress and economic growth. However, output is negatively related to the fraction of the population in the ideas sector because allocating more people to research can reduce the labor available for producing goods, thus decreasing current output.

In the Romer Model, Output Is Increasing in the ________