Questions 37-42 relate to the data from the Penn World Tables in the following table:

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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B4: Solow model predictions
Questions 37-42 relate to the data from the Penn World Tables in the following table:
Output per worker in Savings Rate (Average Human Capital Index
1990-2019)
Pair
Country
2019 (PPP US$)
in 2019
$24,221
$13,589
Thailand
27.3%
2.67
A
Bolivia
13.5%
2.84
$39,741
$2,443
$74,782
$64,150
2.36
Turkey
Niger
25.0%
B
16.6%
1.20
Canada
24.7%
3.69
New Zealand
22.1%
3.30
B4 (a): Basic Solow model
Suppose that each country's aggregate production function can be approximated by the Cobb-Douglas production
function:
Y = AKL.
Suppose, in addition, that the growth rates of the workforce, n, the rate of depreciation, 8, and TFP, A, for each pair
of countries are equal.
Question 37
The actual ratios of output per worker for country pairs A, B and C, respectively, are
2.02; 1.51 and 1.12
1.78; 16.27 and 1.17
1.33; 4.03 and 1.08
1.26; 1.14 and 1.04
Transcribed Image Text:B4: Solow model predictions Questions 37-42 relate to the data from the Penn World Tables in the following table: Output per worker in Savings Rate (Average Human Capital Index 1990-2019) Pair Country 2019 (PPP US$) in 2019 $24,221 $13,589 Thailand 27.3% 2.67 A Bolivia 13.5% 2.84 $39,741 $2,443 $74,782 $64,150 2.36 Turkey Niger 25.0% B 16.6% 1.20 Canada 24.7% 3.69 New Zealand 22.1% 3.30 B4 (a): Basic Solow model Suppose that each country's aggregate production function can be approximated by the Cobb-Douglas production function: Y = AKL. Suppose, in addition, that the growth rates of the workforce, n, the rate of depreciation, 8, and TFP, A, for each pair of countries are equal. Question 37 The actual ratios of output per worker for country pairs A, B and C, respectively, are 2.02; 1.51 and 1.12 1.78; 16.27 and 1.17 1.33; 4.03 and 1.08 1.26; 1.14 and 1.04
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