Using the growth accounting equation, if the growth rate of out is 5%, the growth of labor is 3% and the growth of capital is 2% then if Î±=0.75 then growth of technology can be estimated to be:

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The growth accounting equation is: Growth of output = (α * Growth of capital) + ((1-α) * Growth of labor) + Growth of technology. Substituting the given values: 5% = (0.75 * 2%) + (0.25 * 3%) + Growth of technology. Solving for Growth of technology gives 2.75%.

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