Identify the components of the growth accounting formula
Discuss the weights of each of these components and the different effect that each weight has on output and each other.
ECON 352 – Intermediate Macroeconomics
Chapter 5 – Technology and Economic Growth
1. Identify the components of the growth accounting formula. Discuss the weights of each of these components and the different effect that each weight has on output and each other.
2. Describe three different policies that could be used to increase the growth rate of the potential GDP. Identify whether each policy is aimed at technology, capital formation, or labor supply.
3. Explain what is meant by endogenous growth theory.
4. What is the fundamental difference between the Solow growth model discussed in chapter 4 and the endogenous growth theory? Be sure to comment on the treatment and expression of technology in the two models.
5. Describe the evidence that led to a revival of the neoclassical growth model.
6. What is the real wage? What does it measure from both the employee’s and the employer’s point of view?
7. Explain what is meant by total factor productivity.
