Growth Accounting

We are going to do quantitative research on economic growth. Pick a country and a computer program for doing the calculations - Microsoft Excel will do just Öne. On blackboard you will Önd an excel spreadsheet with Capital per Worker 1965 - 1992 and Capital Share for select countries. Choose one of those countries. Note you will need to do comparison with someone in the class that has chosen another country.

1. Collect data on output per worker for the country selected

2. Assuming a Cobb-Douglas production function with constant returns to scale Önd the log of the Solow Residual for each year. Hint, the production function is (then take logs)

yt = ztk  t

3. For the sample period Önd, hint growth rate

gx = ln xs ln xt s t

if the numbers are one year apart the growth rate is just di§erences in the logs of the series from one year to the next.

• The average annual growth rate in capital per worker 
• The average annual growth rate in real GDP per worker
• The average annual growth rate in TFP
• The percentage of growth in output per worker that can be attributed to technical progress

4. Would you say your estimate of technical progress is steady or follows an unpredictable path.

5. Does your country exhibit technical regress?

6. Find the two biggest drop in TFP in your sample. What years did they occur? Anything special happened in those years?

7. Compare your results to a classmate that did the exercise for another country. How di§erent are the results?

Attachment:- 1418227_2_Capital-Stock-and-Share.xls