(Growth Accounting Exercise). Choose an OECD country over the period of 1950 to 2015 (for some countries, start with the first available year in the data if it is after 1950). We will focus on yearly data.

(a) Calculate the average labor income share. (Note that the labor income share is defined as unambiguous labor income divided by the sum of unambiguous labor income and unambiguous capital income).

(b) Plot the natural log of the yearly Solow residual over time and its linear trend. (Note you need to calculate the capital stock using the perpetual inventory method).

(c) Calculate the average growth rate of the yearly Solow residual. (

d) Calculate the business cycles volatility, measured as the standard deviation of the percentage deviations from linear trend of the natural log series, of the yearly Solow residual.