Growth Rate and Level Decomposition Suppose output Y is given by the production function, Y = AKº (N) ¹ -a where A is the level of TFP, K is physical capital and N is the level of employment and a = 0.33. Let the total population be denoted by P. We have the following data for Vietnam, Table 1: Output, Capital, Population and Employment in Vietnam Year 1988 2003 83,000 243,000 K 74,000 588,000 P 65 82 N 28 41 A. (2 points) Define the dependency ratio, d, as the ratio of those that are not employed (PN) to those that are employed (N) so that d = (P-N)/N. Using the data above, compute the dependency ratio and the level of TFP, A in 1988 and 2003. B. (2 points) Write the growth rate of output per capita, Y/P in terms of the growth rate of output per worker Y/N. [Hint: Define the population to employment ratio as â = 1 + d.]
Growth Rate and Level Decomposition Suppose output Y is given by the production function, Y = AKº (N) ¹ -a where A is the level of TFP, K is physical capital and N is the level of employment and a = 0.33. Let the total population be denoted by P. We have the following data for Vietnam, Table 1: Output, Capital, Population and Employment in Vietnam Year 1988 2003 83,000 243,000 K 74,000 588,000 P 65 82 N 28 41 A. (2 points) Define the dependency ratio, d, as the ratio of those that are not employed (PN) to those that are employed (N) so that d = (P-N)/N. Using the data above, compute the dependency ratio and the level of TFP, A in 1988 and 2003. B. (2 points) Write the growth rate of output per capita, Y/P in terms of the growth rate of output per worker Y/N. [Hint: Define the population to employment ratio as â = 1 + d.]
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