Growth Accounting and Productivity Estimation Exercise

This is an exercise in growth accounting and estimating productivity, and will help you

prepare for Exam 2. A companion Excel file contains all the data you will need. That file has the

average growth rates per decade of output per worker, ŷ , capital per worker, k̂ , and human

capital, ĥ for various counties. It also contains output, capital and human capital per worker

relative to the US for 2010 ( , , )i US i US i USy y k k h h for the sample of countries. The following is

your assignment:

1. Identify the country associated with your last name. You were perform all calculations

only on that country and the US. If you cannot find your name on the list, pick a country of a

student you do not know. If you do not know where your assigned country is, locate it on a map.

2. For your country and the US compute the growth rate of output per worker that is

attributable to factor growth and what is attributable to TFP growth for each decade. Compute

the average TFP growth for both countries across the six decades. Compare your country with

the US with regards to factor growth and TFP growth.

3. Compute the relative productivity of your country to the US in 2010, i USA A . Explain

briefly what this ratio means.