or: This linear difference equation is stable if: or if: sFK(k*,1) < n+(as in the diagram above) Comparative statics in the Solow model: How does the steady state change? - Exogenous parameters: s, n, and any parameters of F(k,1).  (1) Rise (fall) in s: k and y both rise (fall). (2) Rise (fall) in n or k and y both fall (rise). : (3) Shift up (down) in F: k and y both rise (fall). picture: rise in F is like a rise in s except y=F(k,1) shifts up as well) Why might one country have a high level of y and another a low y?
or: This linear difference equation is stable if: or if: sFK(k*,1) < n+(as in the diagram above) Comparative statics in the Solow model: How does the steady state change? - Exogenous parameters: s, n,  and any parameters of F(k,1). (1) Rise (fall) in s: k and y both rise (fall). (2) Rise (fall) in n or : k and y both fall (rise). (3) Shift up (down) in F: k and y both rise (fall). picture: rise in F is like a rise in s except y=F(k,1) shifts up as well) Why might one country have a high level of y and another a low y?