Problem Set 2.pptx

# Problem Set 2.pptx - Problem Set#2 Jack Limongelli Section...

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Problem Set #2 Jack Limongelli Section 3

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Question 1, Part a 1979-2011 Constant GDP per capita, adjusted 2005 US \$
Question 1, Part b 0 50 100 150 200 250 TFP Index for China and India (1979-2011) India China Year TFP Index

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Question 1, Part c 0 0.05 0.1 0.15 0.2 0.25 MPK for China and India (1971-2011) India China Year MPK
Question 1, Part D From 1990 to 2011, the change observed in output per worker was larger driven by a significant increase in capital per worker. India Y/L αK/L TFP 1979-1990 0.47% -2.52% 1.33% 1990-2011 5.10% 6.72% 2.84% China Y/L αK/L TFP 1979-1990 2.58% 3.91% 1.28% 1990-2011 6.70% 10.84% 3.10%

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Question 1, Part E From 1990, both India and China have experienced enormous growth in per capita GDP. In both cases, but more obviously in China, the influx of capital in response to high returns has caused increased output per worker. This claim is supported by the MPK graph: both countries were in dire need of capital in the mid 1980’s, with MPK reaching nearly .22. Undoubtedly, TFP has played a roll in GDP expansion, particularly in the 20 years with the advent of
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