Answer to Question #208555 in Macroeconomics for Mountain

Question

Use the Solow growth model to discuss the implications of this pandemic on the prospects of long run economic growth for South Africa

Answer 1

Solow model analyzes the changes in the economy's level of output caused by changes in population, saving rate, and technological progress. The pandemic is likely to impact negatively on the prospects of long-run economic growth for South Africa. The pandemic has disrupted the economy, whereby saving and investments have declined. The population size is also declining due to increased deaths, whereby human capital is lost, leading to decreased total output and income.