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.]

Oh no! Our experts couldn't answer your question.

Don't worry! We won't leave you hanging. Plus, we're giving you back one question for the inconvenience.

Submit your question and receive a step-by-step explanation from our experts in as fast as 30 minutes.
You have no more questions left.
Message from our expert:
It looks like you may have submitted a graded question that, per our Honor Code, experts cannot answer. We've credited a question to your account.
Your Question:
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.]
Transcribed Image Text: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.]
Knowledge Booster
Gross Domestic Product
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Exploring Economics
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc