Growth accounting Flashcards
X-dot(t) is for _______ time and is the ______, calculated by _____
continuous; change of X; dX(t)/ dt
delta-X is for _______ time and is the ________, calculated by _____
discrete; change of X; [(X_t+delta-t - X_t) / delta-t]
Growth rate of X in continuous time is ______
X-dot / X = d(In X)/ dt
Growth rate of X in discrete time is ______
delta-X / X_t = [ (X_t+delta-t - X_t) / delta-t ] / X_t
To find growth rate in continuous time, take ____ then _____ with respect to _____
log; differentiate; time
Using Cobb-Douglas production function Y = A(t) K(t)^a L(t)^(1 - a), growth rate of Y is _____. All the variables are a function of ____
A-dot/A + a K-dot/K + (1 - a) L-dot/L
g_A + a g_K + (1 - a) g_L
time
g_A is the ______ and ____ measured empirically.
g_Y, g_K, g_L and alpha _____ measured empirically.
Solow residual; cannot be
can be
g_Y/L =
g_Y - g_L
To measure alpha, maximise _____ function, find ______ and rearrange
profit; optimality conditions
Suppose no depreciation of capital
Profit =
AF(K, L) -rK -wL
Optimality conditions are
MPK = r MPN = w
Y = AK^aL^(1-a)
MPK in terms of Y = capital share = ______
aAL^(1-a)K^(a-1) = a Y/ K
Y = AK^aL^(1-a)
MPN in terms of Y = labour share = ______
(1-a)AK^aL^-a = (1-a) Y/ L
alpha =
r = a Y/ K --> a = rK/Y w = (1-a) Y/ L --> a = 1 - wL/Y
Standard estimation of alpha in US is _____
0.33-0.36
g_A of US reduced substantially in the ______ becos of
1) ______
2) ______
3) ______
4) ______
1970s
1) sharp increases in oil price in 1970s
2) structural changes: shift from manufacturing to services
3) reduction in resources spent in R&D in late 60s
4) TFP abnormally high in 50’s and 60’s [g_A = A-dot/A, since A high, g_A low]
Most of the growth in East Asian miracles were due to ______ rather than ______
growth in inputs; growth in TFP
