An economic forecasting firm has estimated the following equation from historical data based on the neoclassical growth
Posted: Wed Jul 06, 2022 6:18 pm
An economic forecasting firm has estimated the followingequation from historical data based on the neoclassical growthmodel:
Potential output growth = 1.55 + 0.69(Growth of labor) +0.32(Growth of capital)
Which of the following statements is true?
The intercept (1.55) in this equation is best interpreted as thelong run sustainable growth rate.
The coefficient on the growth rate of labor (0.69) in thisequation is best interpreted as the labor force participationrate.
The coefficient on the growth rate of capital (0.32) in thisequation is best interpreted as the share of income earned bycapital.
Potential output growth = 1.55 + 0.69(Growth of labor) +0.32(Growth of capital)
Which of the following statements is true?
The intercept (1.55) in this equation is best interpreted as thelong run sustainable growth rate.
The coefficient on the growth rate of labor (0.69) in thisequation is best interpreted as the labor force participationrate.
The coefficient on the growth rate of capital (0.32) in thisequation is best interpreted as the share of income earned bycapital.