Recall the Production function in the Solow Growth model with exogenous technological change isY = AK [(1 + YA) Ne]¹-8The following questions require you to download the excel spreadsheet posted on the course web pagecalled Growth_Accounting.xlsx. The spreadsheet contains data for four variables on the US economyfrom 1960-2007: Real GDP, Capital Stock, total work hours, and working age population. Real GDP,Capital Stock, and total hours are in Billions. Working age population is millions. (Note: you will onlyuse Working Age population in the first question below.)19601961196219631964ARG1965*196610x1967**19681969197019711972197319741975197619771978Lore19791980198119821983196410051985198619971987198819891990199119921002199319941994199519961997199815561999202000www2001MAAA200320042005200620071.2.Plot the natural logarithm of GDP per working age population over the 1960-2007 period.Use the data on GDP, work hours, and capital to compute Solow Residuals using 0-1/3.Plot the natural logarithm of TFP from 1960-2007. Define TFP (i.e, the Solow Residual)to be A(1+YA)(1-))3. Assume a geometric growth rate for all variables. Compute an average annual growth ratefor GDP, work hours, capital and Solow residuals for the entire 1960-2007 period.Find the value of yA that is implied from your calculation of the TFP growth rate for1960-2007. Repeat this but for the 1960-1973, the 1973-1990, and 1990-2007subperiods.4.GDP (billions)2501,82560,02715,22834,02998,63191,13404,43399,1S3484,63523652,7VICE3765,43771,93898,64105,04341,54319,64311,24540,94750,55015,05173,45161,7Food5291,7F10035189,3F43305423,81365813,6606376053,7ma6263,6CATE6475,16742,76981,47112,52007100,5722667336,67532,77835,58031,78328,98703,59066,95470,39470,39817,05817,09890,710048,810301,010675,810989,511294,811523,9K (Billions)5898,06131,36360,36625,46900,27195,47541,67927,3COVE8274,58629,18989,59281,59608,79988,910436,710829,211094,811467,811935,012502,713091,713552,214067,616412014413,814793,81530615395,5IEDERE15959,616504,417057,217591,218134,318606,318948,419322,019745,420283,120829,721438 521438,522157.322157,322957,923839,045055,024764,6stronge25499,926156,926832,727644,328549,629483,8Hours (Billions)128,5128,7132,6135,0138,7142,7145,9***146,6140.0148,81510151,9ITAA151,4w151,9157,6163,2164,3160,7166,6171,8178,8182,9dok, 3181,8183,8179,6183,0191,7194,5197,8202.9206,9210,5211,9208,7210,72107214,52208220,8222,8222 8226,0232,4235,8238,1250, 1244,2**242,1*240,6241,4244,0249,1254,6256,7population 16-64 (thousands)105160106314107407109497111301111501113090410000114896116835118805100120781100000122963IDENCE125265127572129951132317134647137040139486141920141520144308M146731Chade148709150388APARTA151874*****153314CATED154758*Com156277157792159110160180161396163124164849166710166719168638170652172945172945175445175445178018176016180606LOUOUO182987Loks or185471187916190146192329194528196872199004

The Solow growth model, named after economist Robert Solow , is a fundamental concept in…

Recall the Production function in the Solow Growth model with ex Y = AK [(1 + YA) N₁ The following questions require you to download the excel spreads called Growth Accounting.xlsx. The spreadsheet contains data fom from 1960-2007: Real GDP, Capital Stock, total work hours, and Capital Stock, and total hours are in Billions. Working age populat use Working Age population in the first question below.) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1970 1971 1972 1972 1973 1974 1975 1976 1977 1978 1070 1979 1000 1960 1901 1961 1982 1962 1992 1963 1964 1984 1965 1906 1506 1967 1968 1909 1990 1991 1992 1993 1994 1995 1996 1997 1000 1996 1000 1999 mmm 2000 m 2001 vm 2002 2003 2004 2005 2006 2007 1. 2. Plot the natural logarithm of GDP per working age Use the data on GDP, work hours, and capital to c Plot the natural logarithm of TFP from 1960-2007 to be A(1+YA)(1-0).) 3. 4. Assume a geometric growth rate for all variables.. for GDP, work hours, capital and Solow residuals Find the value of YA that is implied from your calc 1960-2007. Repeat this but for the 1960-1973, the subperiods. GDP (billions) 2501,8 2560,0 2715,2 2834,0 2998,6 3191,1 1500 3399,1 2494 6 3484,6 3652,7 3765,4 3771,9 3898,6 4105,0 4341,5 4319,6 4311,2 45409 4540,9 TERE 4750,5 EMER 5015,0 5173,4 5161,7 5291,7 5189,3 5423,8 5813,6 6053,7 6263,6 6475,1 6742,7 6961,4 7112,5 7100,5 7336,6 7532,7 7835,5 8031,7 man 8328,9 m 8703,5 DOCED 9066,9 9470,3 00170 9617,0 0000 9890,7 K (Billions) 1048 10048,8 10301,0 10675,8 10969,5 11294,8 115239 5896,0 6131,3 6360,3 6625,4 6900,2 7195,4 TEALE 7541,6 2017 2 7927,3 8274,5 8629,1 8989,5 9281,5 9608,7 9988,9 10436,7 10829,2 11094,8 we 11467,8 110366 11935,0 12502,7 13091,7 125527 13552,2 14067,6 14413,8 14793,8 15395,5 15959,6 16504,4 17057,2 17591,2 18134,3 13606,3 18948,4 19322,0 19745,4 20283,1 20829,7 21438,5 ET 22157,3 MA 22957,9 33030.0 23839,0 247646 24764,6 254999 25499,9 26156,9 26832,7 27644,3 285-49,6 29483,8 Hours (Billions) 128,5 128,7 132,6 135,0 138,7 142,7 145,9 146,6 148,8 151,9 151,4 151.4 151,9 157,6 163,2 164,3 160,7 166,6 171,8 170 178,8 1920 182,9 1010 181,8 102 0 183,8 179,6 179 6 183,0 191,7 194,5 197,8 202,9 206,9 210,5 211,9 208,7 210,7 214,5 zaujo 220,8 222,8 MA 226,0 ma 232,4 WA 235,8 30 238,1 343 244,2 mi 242,1 240,6 241,4 244,0 249,1 254,6 256,7 population 16-64 (thou 105160 106314 10740 10949 11130 113000 113090 1100 114896 116835 116825 11880 118808 12078 12296 12526 127572 12995 12995 13231 13464 137040 139408 139488 141035 141920 www 144308 14673 148705 148709 1503 88 15187 153314 15475 15627 15779 1591 10 160180 16139 16312 16484 166715 1686 38 170652 www 172945 www 175445 *** 178018 10. 180608 10300 18298 10547 185472 107016 1879 18 1901 48 1923 29 1945 28 196872 19900