Consider a country where per capita GDP (Y/L) is 1/4 of the one in the US and the capital per worker (K/L) is 1/8 of the one in the US. According to the production model from the lecture (with Cobb-Douglas production function and capital share equal to 1/3) the country's TFP relative to US TFP is equal to

Consider a country where per capita GDP (Y/L) is 1/4 of the one in the US and the capital per worker (K/L) is 1/8 of the one in the US. According to the production model from the lecture (with Cobb-Douglas production function and capital share equal to 1/3) the country's TFP relative to US TFP is equal to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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