Using the growth accounting equation, if the growth rate of technology is 3%, the growth of labor is 2% and the growth of capital is 1% then if Î±=0.75 then growth of output can be estimated to be:

Question

Quizplus · Accepted Answer

The growth accounting equation is: Growth of Output = Growth of Technology + α*(Growth of Capital) + (1-α)*(Growth of Labor). Substituting the given values: 3% + 0.75*1% + 0.25*2% = 4.25%.

Using the Growth Accounting Equation, If the Growth Rate of Technology