According to the Romer model,an increase in population will cause ________.

Question

Quizplus · Accepted Answer

According to the Romer model, an increase in population will cause a decrease in output per capita in the short run due to diminishing returns to capital. However, in the long run, the increase in population will lead to an increase in output per capita due to technological progress stimulated by increased innovation, research and development caused by the larger pool of skilled workers. Therefore, the increase in population will cause an immediate decrease in output per capita and a permanent increase in output per capita.

According to the Romer Model,an Increase in Population Will Cause