Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

Now suppose that each country i has a CobbDouglas production function of the form Ya = A1: K313 Lit/3 where Y}, denotes real GDP, Kit

image text in transcribed
image text in transcribed
Now suppose that each country i has a CobbDouglas production function of the form Ya = A1: K313 Lit/3 where Y}, denotes real GDP, Kit denotes capital, and L\" denotes the number of employed workers in country i on date t. Note that each country has the same share parameter or = 1/3 but they have different levels of total factor productivity (TFP) denoted Ait. Using this assumption, calculate and report the average annual growth rate of TFP over the whole sample and over each decade (1950s, 1960s, . . ., 2010s) 7 again, subject to data availability for each country. Now suppose that the production function is instead 1 3 Yit = Ait Kit/ (HitLit)2/3 where Hit denotes average hours per worker, i.e., here the measure of labour input is total hours, not total employment. How if at all does this change your conclusions about TFP growth

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials of Business Law

Authors: Anthony Liuzzo

9th edition

978-0078023194

Students also viewed these Economics questions

Question

Which of the following is true about binary trees:

Answered: 1 week ago