Question

Please do it by type not pics.

1.The empirical tit of ttte production model: The table below reports per capita GDP and capital per person in the year 2014 for 10 countries. Your task is to fill in the missing columns of the table.

a.Given the values in columns 1 and 2, fill in columns 3 and 4. That is, compute per capiiz GDP and capital per person relative to the U.S. values.

b.In column 5, use the production model (with a capital exponent of 1/3) to compute predicted per capita GDP for each c‹runtry relative to the United States, assuming there are no TFP differences.

c.In column 6, compute the level of TFP for each country that is needed to match up the model and the data.

d.Comment on the general results you find.

In 204 I dollars                                  n•Iativ* to the U.fl. values (If.6. = 4 )

Country	t+) Capital per person	IV) Per capita GDP	(*) Capital per person	/4J Par capita GDP	Ist Predicted y*	T6) Implied TFP to match data
United States	141,841	51,958	1.000	1.000	1.000	1.000
Canada	128,667	45,376
France	162,207	37,360
Hong Kong	159,247	45,095
South Korea	120,472	34,961
Indonesia	41,044	9,797
Argentina	53,821	20,074
Mexico	45,039	15,521
Kenya	4,686	2,971
Ethiopia	3,227	1,505

Answer 1

The Capital per person relative to US will be the capital per person in that country divided by capital per person for US.

For Canada= (128,667/141,841) = 0.907

The per capita GDP relative to US will be per capita GDP for a given country divided by per capita GDP for US.

For Canada= (45,376/51,958) = 0.873

The predicted y* as per production function which is presumed to be y=Ak^1/3

So related to US, the predicted y* would be predicted y* for a given country divided by predicted y* for US.

For Canada= [A.(128,667)^1/3]/[ A.(141,841)^1/3]= (128,667/141,841)^1/3= 0.967

Last for the required TFP

Setting the US TFP as 1, so the required TFP for matching US will be calculated form the given formula. y*=A*.(k^1/3 for a given country/k^1/3 for US)

Or A*=y* for US/(k^1/3 for a given country/k^1/3 for US)

Country	t+) Capital per person	IV) Per capita GDP	(*) Capital per person	/4J Par capita GDP	Ist Predicted y*	T6) Implied TFP to match data
United States	141,841	51,958	1.000	1.000	1.000	1.000
Canada	128,667	45,376	0.907	0.873	0.967	1.034
France	162,207	37,360	1.144	0.719	1.046	0.956
Hong Kong	159,247	45,095	1.122	0.868	1.039	0.962
South Korea	120,472	34,961	0.849	0.673	0.946	1.057
Indonesia	41,044	9,797	0.289	0.188	0.661	1.513
Argentina	53,821	20,074	0.379	0.386	0.723	1.383
Mexico	45,039	15,521	0.317	0.298	0.681	1.468
Kenya	4,686	2,971	0.033	0.057	0.321	3.115
Ethiopia	3,227	1,505	0.023	0.029	0.284	3.521