First, surf to your Berkeley datahub instantiation at: https://datahub.berkeley.edu/hub/user-redirect/git-pull?repo=https%3A%2F%2Fgithub.com%2Fbraddelong%2Flecture-support-2020&urlpath=tree%2Flecture-support-2020%2F. Then open the Jupyter notebook file I have written called: lecture-support-solow-alternative-2020-01-23.ipynb. You should then have, open, my Solow Growth Model Simulator.
Second, in another window, surf to and and read my: Simulating the Solow Growth Model https://www.bradford-delong.com/2020/01/simulating-the-solow-growth-model.html. Follow the directions given there by editing the second code cell in the Jupyter notebook file lecture-support-solow-2020-01-23.ipynb, and then clearing all variables, restarting the Python kernel, running all the code cells, and examining the results.
Some computational experiments you might think of doing are:
- From some initial baseline growth scenario, suppose that the savings rate s were to suddenly and permanently jump upwards by 5% of national income Y. How would the growth path in that counterfactual scenario compare to the baseline?
- Suppose that a war leads to enormous destruction that halves the capital intensity κ of the economy. How does the counterfactual growth path after such a war compare to the baseline in which such a war did not happen?
- Suppose that population and labor force growth n were to slow by 2%age points per year to zero. How does the counterfactual growth path after such an end to population increase compare to the baseline in which population and labor force growth continued at 2% per year?
But you do not have to do all, or any of these: choose your own scenarios that you find interesting.
Third, come back to this webpage and upload a file of 200-300 words plus screenshots of interesting numbers or graphs (or a screenshot of an interesting and puzzling error message) as your assignment. Tell us why you chose the parameter values and starting conditions you did, what (if anything) you learned from this exercise, and how useful you think models and exercises like this are in understanding economic growth out there in the real world.