Consider the following data, which apply to countries X and Z in the years 1975 and 2010.
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Consider the following data, which apply to countries X and Z in the years 1975 and 2010.
In both countries, the production function
(in per-worker terms) is y = Akah1-a, where a = 1/3.
Country Year Output per Worker, y Physical Capital per Worker, k Human Capital per Worker, h X 1975 100 1 1 2010 1,200 27 8 Z 1975 50 2 2 2010 1,200 54 16 Which country had higher productivity growth between 1975 and 2010? Show how you got your answer. (You do not need to use a calculator to answer this question.)
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