Question
I am taking a macro economics course and learning about the Solow Model. I would like to learn how to calculate the savings rate using
I am taking a macro economics course and learning about the Solow Model. I would like to learn how to calculate the savings rate using the following information:
In 2014, GDP in China was still smaller than US GDP, but growing much faster. Let's analyze how will China's economy will fare in the next 15 years or so. (Note that using Excel, or any other software package, to answer the questions that follow will make your work much easier).
Assume it is January 1, 2015 and use the Solow model to estimate economic growth in China up to 2030. Download the spreadsheetwhich reports data for China's population, employment, GDP, capital stock, and educational attainment between 1975 and 2014. Educational achievement is proxied by average years of schooling. Population and employment are in thousand of individuals. GDP and capital are expressed in millions of 2011 PPP-adjusted US dollars. Assume that the production function is of the form Y = AK(HL)1and that the depreciation rate is 6% per year.
- Saving Rate
Use the law of motion for the capital stock in order to obtain estimates of the saving rate in all years 1975-2013.
| year | gdp | population | employment | capital | education |
| 1975 | $1,242,576.00 | 905.5804 | 407.9577 | 1398982.125 | 4.102447 |
| 1976 | $1,230,911.00 | 921.6882 | 420.9138 | 1497865.5 | 4.2533691 |
| 1977 | $1,270,306.00 | 936.5545 | 432.582 | 1629328.625 | 4.4042912 |
| 1978 | $1,441,441.00 | 950.5373 | 445.5044 | 1797925.75 | 4.5552134 |
| 1979 | $1,509,705.00 | 964.1552 | 460.5417 | 1968592.75 | 4.7061355 |
| 1980 | $1,542,770.00 | 977.8374 | 479.1169 | 2156994 | 4.8570576 |
| 1981 | $1,592,155.00 | 991.5538 | 500.9003 | 2327858.5 | 4.9477088 |
| 1982 | $1,737,619.00 | 1005.329 | 519.1486 | 2499923.75 | 5.03836 |
| 1983 | $1,861,403.00 | 1019.698 | 533.1974 | 2586460.25 | 5.1290112 |
| 1984 | $2,113,989.00 | 1035.329 | 546.7159 | 2769155.25 | 5.2196625 |
| 1985 | $2,342,021.00 | 1052.622 | 560.2422 | 2983624.25 | 5.3103137 |
| 1986 | $2,463,038.00 | 1071.835 | 572.0871 | 3282196.75 | 5.3657318 |
| 1987 | $2,600,514.00 | 1092.647 | 582.4245 | 3572735.75 | 5.4211499 |
| 1988 | $2,693,208.00 | 1114.162 | 598.1485 | 3896080.75 | 5.476568 |
| 1989 | $2,682,698.00 | 1135.128 | 619.0762 | 4112408.25 | 5.5319861 |
| 1990 | $2,692,559.00 | 1154.606 | 637.0748 | 4405169 | 5.5874043 |
| 1991 | $2,872,830.00 | 1172.328 | 651.2 | 4603259 | 5.734796 |
| 1992 | $3,151,253.00 | 1188.45 | 658.215 | 4911135 | 5.8821877 |
| 1993 | $3,496,467.00 | 1202.983 | 664.8 | 5470074.5 | 6.0295794 |
| 1994 | $3,697,357.00 | 1216.067 | 671.315 | 6111468.5 | 6.1769711 |
| 1995 | $4,108,395.00 | 1227.841 | 677.6 | 6843664.5 | 6.3243628 |
| 1996 | $4,275,323.00 | 1238.235 | 685.075 | 7549487.5 | 6.4446124 |
| 1997 | $4,484,423.00 | 1247.259 | 693.85 | 8348899.5 | 6.5648621 |
| 1998 | $4,480,408.00 | 1255.263 | 702.285 | 9341167 | 6.6851117 |
| 1999 | $4,786,411.00 | 1262.714 | 710.155 | 10377540 | 6.8053614 |
| 2000 | $5,108,341.00 | 1269.975 | 717.395 | 11468023 | 6.925611 |
| 2001 | $5,506,417.00 | 1277.189 | 725.55 | 12694115 | 6.9981645 |
| 2002 | $6,113,615.00 | 1284.35 | 733.825 | 14055351 | 7.0707179 |
| 2003 | $6,661,583.00 | 1291.485 | 740.86 | 15798115 | 7.1432714 |
| 2004 | $7,407,745.00 | 1298.573 | 748.16 | 18093094 | 7.2158248 |
| 2005 | $8,209,448.00 | 1305.601 | 755.125 | 20994712 | 7.2883782 |
| 2006 | $9,035,262.00 | 1312.601 | 761.125 | 24752358 | 7.333301 |
| 2007 | $10,000,000.00 | 1319.625 | 766.95 | 28425092 | 7.3782237 |
| 2008 | $10,400,000.00 | 1326.691 | 772.35 | 32259552 | 7.4231464 |
| 2009 | $11,400,000.00 | 1333.807 | 777.375 | 36784308 | 7.4680692 |
| 2010 | $12,600,000.00 | 1340.969 | 781.3768 | 42218080 | 7.5129919 |
| 2011 | $13,800,000.00 | 1348.174 | 784.4269 | 48872912 | 7.5579146 |
| 2012 | $14,900,000.00 | 1355.387 | 788.8708 | 54610668 | 7.6028374 |
| 2013 | $15,900,000.00 | 1362.514 | 793.0223 | 61477376 | 7.6477601 |
| 2014 | $17,100,000.00 | 1369.436 | 798.3678 | 69379696 | 7.6926828 |
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Introductory Econometrics A Modern Approach
Authors: Jeffrey Wooldridge
7th Edition
1337558869, 978-1337558860
