Answer to Question #207052 in Macroeconomics for Faith

Question

Use specifically the Solow growth model to discuss the implications of this pandemic on the change in productivity or labour efficiency on long-run economic growth

Answer 1

Slow growth model is an economic growth model that investigates a change in the level of an economic output that may have resulted from the changes in technological and population growth rate over time.

The pandemic short term effects had various implications that affected the labor supply for instance, making it difficult to work under a conducive business environment thus, a rise in the provision rate of the required needs for childcare support.

On the other hand, long term implementations resulted to a wastage of resources that could be used in future for labor supply due to the closing down of schools. Therefore, Bosler et al system is used to measure the channels magnitude. The magnitude effects of labor is calculated as income shares weighted average of changes in hours across the segmented groups. Thus, the adjustment of viable work input in the weighted average of changes in the expected hours across the segmented groups, where the weights are the income portion of every group.