You Have Been Asked to Calculate TFP Growth for Four

question 90

Essay

You have been asked to calculate TFP growth for four countries from 1985-2014: China, Hungary, South Korea, and Mexico. You decide to reach for the Solow growth model to do your calculations, specifically, the Cobb-Douglas production function:
. Using the data available in the table below, which shows the average labor share and growth rates of real GDP per capita, labor composition, and capital per capita from 1985-2014, find the TFP growth rate for each country. Given what you know about each country, what may explain your results?Table 6.3
(Source: Penn World Tables 9.0)

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Definitions:

Cultures

The collective norms, values, beliefs, and practices of a group of people, which shape their behavior and perspectives.

Body Language

Non-verbal forms of communication, including gestures, postures, and facial expressions, used to convey emotions and intentions.

Face-to-face Communication

Direct interaction between two or more people, allowing for immediate feedback and the utilization of verbal and non-verbal cues.

Dress for Success

The concept of wearing clothing that is professionally and culturally appropriate for a particular business setting or occupation to make a positive impression.