Assume an economy has grown by 8% per year over the past 20 years. During the same period, the labour force has grown by 2% per year and the quantity of physical capital has grown by 4% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.33%. Assume that human capital has not changed during the past 30 years. What is the growth rate in Physical Capital per worker over this time period? What is the growth rate in output per worker over this time period? How much has technological progress contributed to productivity growth?
Assume an economy has grown by 8% per year over the past 20 years. During the same period, the labour force has grown by 2% per year and the quantity of physical capital has grown by 4% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.33%. Assume that human capital has not changed during the past 30 years. What is the growth rate in Physical Capital per worker over this time period? What is the growth rate in output per worker over this time period? How much has technological progress contributed to productivity growth?
Chapter8: Productivity And Growth
Section: Chapter Questions
Problem 2.4P
Related questions
Question
Assume an economy has grown by 8% per year over the past 20 years. During the same period, the labour force has grown by 2% per year and the quantity of physical capital has grown by 4% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.33%. Assume that human capital has not changed during the past 30 years. What is the growth rate in Physical Capital per worker over this time period? What is the growth rate in output per worker over this time period? How much has technological progress contributed to productivity growth?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
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.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Microeconomics: Private and Public Choice (MindTa…
Economics
ISBN:
9781305506893
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning
Economics: Private and Public Choice (MindTap Cou…
Economics
ISBN:
9781305506725
Author:
James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:
Cengage Learning