Answer to Question #247153 in Macroeconomics for innocent kampumba

Question

During a high-level conference in Paris,France,an economist,Jagaban,confidently
remarked,“Countries with low population growth rates,like Italy and Japan,have
higher income per person than those with high growthrates such as Zambia and
Jordan.”Use the Solow growth model to explain his claim.

Answer 1

The Solow–Swan model is an economic model for long-run economic growth set within the framework of neoclassical economics. It aims to explain the long-run economic growth by looking at capital accumulation, labor or population growth, and increases in productivity.

The lower the population growth the higher the income per person because there is less people who will be employed which makes the employees to pay them highly compared to when the population is high since the jobs will less compared to the people hence getting paid lowly.