Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 3. (Computer Exercise) Let's take the Solow growth model to actual data. (a) From FRED, download annual data on the real GDP. real capital

image text in transcribed
Problem 3. (Computer Exercise) Let's take the Solow growth model to actual data. (a) From FRED, download annual data on the real GDP. real capital stock, and population in the United States for the longest period available. On Excel or other spreadsheet software, compute the total factor productivity in every year during this period as Y AI = v K: Le where Y} is the real GDP, K: is the real capital stock, and L: is the population in year t. Assume that at = 1/3. (b) Let's call K in the capital component and Ltl'\" the labor component of the output. In a single graph, show (i) the growth rates of output, (ii) growth rates of the total factor productivity, (iii) growth rates of the capital component, and the (iv) growth rates of the labor component. On average during this period, how much of the output growth is explained for by the growths in technology, capital, and labor, respectively? (c) Repeat (a)(b) for another country of your choice. Compare the results from the two countries. What have you learned about the growth experiences of these twu countries

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Development Economics In The Twenty-First Century

Authors: Claudia Sunna, Davide Gualerzi

1st Edition

1317219961, 9781317219965

More Books

Students also viewed these Economics questions