In 2020, the pandemics of Coronavirus has caused an unprecedented global economic crisis. For example, in...

 

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In 2020, the pandemics of Coronavirus has caused an unprecedented global economic crisis. For example, in the United States, the Covid-19 has damaged total national output of this country via several channels, including a supply shock, a demand shock and a historical financial shock. The influence of this heath crisis varied by industries and across subsectors within an industry. Suppose, we can use a Cobb-Douglas production function to estimate national output (Y) of the US economy as Y, AK" L¹, where t indicates the year. Here K indicates total capital input and L is total labor, and we have a = 30% or 0.3. Also, we know the coefficient of A is the total factor of productivity (TFP). As a benchmark, the value of A=2 in 2019. Thus, the production function of GDP in 2019 can be expressed as Y 2019-2 Kº L. Please use the following information to estimate national output (GDP) growth rates in 2020 and 2021. Note: You can use 2019's GDP as a benchmark and estimate growth rate of 2020 based on the level of 2019. Here we assume a has the same value (a=0.3). In 2020, the pandemics of Coronavirus has caused an unprecedented global economic crisis. For example, in the United States, the Covid-19 has damaged total national output of this country via several channels, including a supply shock, a demand shock and a historical financial shock. The influence of this heath crisis varied by industries and across subsectors within an industry. Suppose, we can use a Cobb-Douglas production function to estimate national output (Y) of the US economy as Y, AK" L¹, where t indicates the year. Here K indicates total capital input and L is total labor, and we have a = 30% or 0.3. Also, we know the coefficient of A is the total factor of productivity (TFP). As a benchmark, the value of A=2 in 2019. Thus, the production function of GDP in 2019 can be expressed as Y 2019-2 Kº L. Please use the following information to estimate national output (GDP) growth rates in 2020 and 2021. Note: You can use 2019's GDP as a benchmark and estimate growth rate of 2020 based on the level of 2019. Here we assume a has the same value (a=0.3).