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Question: suppose we have two economies tasmania and iceland ...

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Suppose we have two economies - Tasmania and Iceland - that are identical, except that one begins with a stock of ideas that is twice as large as the other. The two economies are so far apart that they don’t share any ideas and each evolves as a separate Romer economy. On a single graph, plot the behaviour of GDP per capita in Tasmania and Iceland over time. What is the effect of starting out with more knowledge?

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