Question
explain your answer. 2. Consider a Cobb-Douglas production function, Y = AK ( hL ) [1] , where = 1 / 3. By conducting a
explain your answer.
2. Consider a Cobb-Douglas production function, Y = AK(hL)[1], where = 1/3. By conducting a growth accounting exercise with the Chinese data1 in the following table, answer the following questions:
a)What is the average annual growth rate of productivity?
b)What is the percentage contribution of physical capital accumulation
to economic growth?
c)What is the percentage contribution of human capital accumulation to
economic growth?
d)What is the percentage contribution of productivity improvements to
economic growth?
Year
Output per worker
Capital per worker
Human capital per worker
1960
2681.44
3377.43
1.22
2010
16354.67
55592.51
2.34
[1] Data source: Penn World Tables
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