5. Growth in GDP per capita in France has slowed down considerably in the late 1990s. Your task is to understand why. Here are some data that you will find useful: Year GDP 1961 387 1974 769 2000 1,350 Popula- tion 47.317 53.771 60.431 Capital 1,110 1,920 3,850 Labor 20.410 23.174 27.497 Educa- tion 5.44 6.00 7.86
5. Growth in GDP per capita in France has slowed down considerably in the late 1990s. Your task is to understand why. Here are some data that you will find useful: Year GDP 1961 387 1974 769 2000 1,350 Popula- tion 47.317 53.771 60.431 Capital 1,110 1,920 3,850 Labor 20.410 23.174 27.497 Educa- tion 5.44 6.00 7.86
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please solve all parts of this question
Transcribed Image Text:5. Growth in GDP per capita in France has slowed down considerably in the late 1990s.
Your task is to understand why. Here are some data that you will find useful:
Year
GDP
1961
387
1974
769
2000 1,350
Popula-
tion
Capital
Labor
47.317
1,110
20.410
53.771
1,920
23.174
60.431 3,850 27.497
GDP and capital are expressed in billions of 2000 US dollars. Population and em-
ployment are in millions of heads. Education is the average number of years of school
completed among people older than 15. The production function is:
Y=AK (NH)
where K is the capital stock, H is education and N is the labor input.
(a) Using the same formula as in the previous exercise, compute
Growth rate (%)
Annual growth rate of GDP per capita over the period 1961-2000:
Contribution to
GDP growth (%)
Annual growth rate of GDP per worker over the period 1961-2000:
P
(b) Use our growth accounting methodology to allocate growth in output per capita
over the period 1961-2000 to growth in TFP, employment rate, capital per worker,
and human capital, respectively. Fill the following table:
Educa-
tion
A
5.44
6.00
7.86
NA
F
K
N
H
Where Y=GDP, P=total population, K=capital, N=labor, H=human capital
(education), A=total factor productivity (TFP).
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