Problem
Assume that the Solow model accurately describes the growth experience of Kuwait. As a result of the Gulf war, much of the capital in Kuwait (oil extracting equipment, vehicles, structures etc.) was destroyed. Answer the following questions, and provide brief explanations.
What will be the effect of this event on per capita income in Kuwait in the next five years?
What will be the effect of this event on per capita income in Kuwait in the long run?
What will be the effect of this event on the annual growth rate of per capita income in Kuwait in the next five years?
What will be the effect of this event on the growth rate of per capita income in Kuwait in the long run? Will recovery in Kuwait occur faster if investment by foreigners is permitted, or if it is prohibited?
Would Kuwaiti workers gain or lose by a prohibition of foreign investment? Would Kuwaiti capitalists gain or lose?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.