labour EXPLORE FURTHER From the Penn World Tables, you can fill in the table below: 8. Growth accounting Year 2000 Year

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Labour Explore Further From The Penn World Tables You Can Fill In The Table Below 8 Growth Accounting Year 2000 Year 1 (59.44 KiB) Viewed 39 times

labour EXPLORE FURTHER From the Penn World Tables, you can fill in the table below: 8. Growth accounting Year 2000 Year 2014 The appendix to this chapter shows how data on output, capi- Y N K Share of Y N K Share of tal, and labour can be used to construct estimates of the rate of labour growth of technological progress. We modify that approach in China this problem to examine the growth of capital per worker: United States Y = 1/3(AN)2/3 Use rgdpo for output (2011 US dollars); emp for number of employees' labour input; ck for the capital stock (2011 US The function gives a good description of production in rich coun- dollars). tries. Following the same steps as in the appendix, you can show that: The share of labour is labsh. These values are copied directly from the Penn World Tables version 9. (2/3)8A = 8v - (2/3)8N - (1/3)8K = (y - 8) - (1/3)(8K - 8) Calculate annual growth rates of these variables over the 14 years of available data and answer these questions: where gy denotes the growth rate of Y, 8x is the growth rate of a. Is the ratio of K/N rising or falling in China? capital, and en is the growth rate of the labour input. a. What does the quantity &r – 8n represent? What does the c. Which country has the highest labour share? b. In the United States? quantity &k - represent? b. Your download of the Penn World Tables in Chapter 11 d. Which country has the largest residual? (Use the average includes the information needed to calculate the compo- labour share over the two years to calculate the residual.) nents of the growth accounting formula in the appendix. e. What does that residual represent? That formula is: f. Are you surprised by any of your results? residual - & -fagn + (1 + a)8x]