3 Y = zK0.45 N0.55Consider the following data:Year Y (billions of 2005 dollars) K (billions of 2005 dollars) N (millior19958745.0030500.00122.0019969120.0031023.90123.6019979531.3031992.30125.8019989944.3032325.50127.60199910431.6033127.50129.50200010663.3033680.50127.60200110982.9034250.90127.50200211035.5535162.15125.41200311123.9635613.11125.21200411302.6936000.60123.53200511427.3536715.67121.73200611593.4437449.09119.81200711663.3437714.94117.97(1) Calculate the Solow residual for each year from 1995 to 2007 (hint:don't convert millions to billions or vice versa).(2) Calculate percentage rates of grwoth in output, capital, employment,and total factor productivity for each year from 1996 to 2007. Overall,what factor contributes the least to the growth in aggregate output?Do you see that the 2001 recession makes the growth of GDP slower(in other words, is the growth rate in years 2001-2007 higher or lowerthan the years 1996-2000)? (Note: use the log-difference to calculatethe growth rates)

Answered: Consider the following data:

Business

Economics

Consider the following data:

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter5: Business And Economic Forecasting

Section: Chapter Questions

Problem 1.3CE: Logarithms are especially useful for comparing series with two divergent scales since 10 percent...

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Question

Y = zK0.45 N0.55
Consider the following data:
Year Y (billions of 2005 dollars) K (billions of 2005 dollars) N (millior
1995
8745.00
30500.00
122.00
1996
9120.00
31023.90
123.60
1997
9531.30
31992.30
125.80
1998
9944.30
32325.50
127.60
1999
10431.60
33127.50
129.50
2000
10663.30
33680.50
127.60
2001
10982.90
34250.90
127.50
2002
11035.55
35162.15
125.41
2003
11123.96
35613.11
125.21
2004
11302.69
36000.60
123.53
2005
11427.35
36715.67
121.73
2006
11593.44
37449.09
119.81
2007
11663.34
37714.94
117.97
(1) Calculate the Solow residual for each year from 1995 to 2007 (hint:
don't convert millions to billions or vice versa).
(2) Calculate percentage rates of grwoth in output, capital, employment,
and total factor productivity for each year from 1996 to 2007. Overall,
what factor contributes the least to the growth in aggregate output?
Do you see that the 2001 recession makes the growth of GDP slower
(in other words, is the growth rate in years 2001-2007 higher or lower
than the years 1996-2000)? (Note: use the log-difference to calculate
the growth rates)

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