You computed a residual term representing the growth rate of technology using the expression

and the annual growth rates of output, \(g_{Y}\); labor input, \(g_{N}\); and capital input, \(g_{K}\). What was the value of that residual for the period from 2000 to 2014 ?

From the Penn World Tables, fill in the chart below:

Reminder: Use rgdpo for output (2011 US dollars); emp number of employees labor input; ck for the capital stock (2011 US dollars). The share of labor is labsh.

Compute growth rates of Y, N, and K between 1985 and 1999. Do the same calculation for the period from 2000 to 2014 or use your results from Chapter 12.

a. Compare the growth rate of technology in the periods 1985-1999 and 2000-2014.

b. The FRED database provides the following variable as a measure of the unemployment rate of a low-skill group of labor force participants: High school graduates with no college aged 16-24 (series LNU04023068). This data begins in 1985. Find this series and describe the graph of this series from 1985 to 2018 (or the latest date available). What happened to the unemployment rate of this group from 2009 to 2013? Then download the series to a spreadsheet.

c. Now calculate the average unemployment rate of this group over these three periods: \(1985-1999,2000\) to the end of the data, and 2017 to the end of your data. How do the three unemployment rates compare? Does your result support the proposition that more rapid technological change increases the unemployment rate of low skill workers? Explain why you also looked at the years after 2017.

Transcribed Image Text:

residual === gy [agn (1- a)gk]