Define total factor productivity (TFP). Show how to use the production function to estimate the TFP for Mexico relative to the United States. (If you want to use numbers, Mexico’s capital per person (k) was 32% of the U.S.’s and its GDP per capita was 30% of U.S.’s in 2014.) Germany has 2% more capital per person that the U.S., and German GDP per person is about 90% of U.S. GDP per person. Is TFP higher in the U.S. or in Germany?

Define total factor productivity (TFP). Show how to use the production function to estimate the TFP for Mexico relative to the United States. (If you want to use numbers, Mexico’s capital per person (k) was 32% of the U.S.’s and its GDP per capita was 30% of U.S.’s in 2014.) Germany has 2% more capital per person that the U.S., and German GDP per person is about 90% of U.S. GDP per person. Is TFP higher in the U.S. or in Germany?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter20: Economic Growth

Section: Chapter Questions

Problem 23CTQ: Labor Productivity and Economic Growth outlined the logic of how increased productivity is...

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