According to the real business cycle theory, productivity shocks are an important source of business cycles. Using

Question:

According to the real business cycle theory, productivity shocks are an important source of business cycles. Using the Cobb-Douglas production function and annual data since 1961, calculate and graph U.S. total factor productivity. Use real GDP for $Y$, the capital stock from the source listed in Table 3.1 for $K$, and civilian employment for $N$. Look for periods marked by sharp changes up or down in productivity. How well do these changes match up with the dates of business cycle peaks and troughs?

Table 3.1