Question: explain your answer. 2. Consider a Cobb-Douglas production function, Y = AK ( hL ) [1] , where = 1 / 3. By conducting a

explain your answer.

2. Consider a Cobb-Douglas production function, Y = AK(hL)^[1], where = 1/3. By conducting a growth accounting exercise with the Chinese data¹in the following table, answer the following questions:

a)What is the average annual growth rate of productivity?

b)What is the percentage contribution of physical capital accumulation

to economic growth?

c)What is the percentage contribution of human capital accumulation to

economic growth?

d)What is the percentage contribution of productivity improvements to

economic growth?

Year

Output per worker

Capital per worker

Human capital per worker

1960

2681.44

3377.43

1.22

2010

16354.67

55592.51

2.34

[1] Data source: Penn World Tables

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