Download the file snapshots.pdf from www. stanford.edu/~chadj/snapshots.html and answer the following. (At the moment, the latest year in the data file is 2010. Over time, this year will advance, so please use the latest year available in the Country Snapshots file whenever the year 2010 appears in questions below.)
(a) What was the ratio of per capita income in each of the following countries to that in the United States in the year 2010: Ethiopia, Mexico, India, and Japan?
(b) Which country had the faster average annual growth rate of per capita GDP between 1960 and 2010, Botswana or China?
(c) Rank these countries in order of population: Bangladesh, Brazil, Indonesia, Nigeria, Russia, the United States.
(d) Which is larger as a share of GDP in most rich countries, investment or government purchases? What about in most poor countries?
(e) Exchange rates are reported as units of domestic currency (like the Japanese yen or the British pound) per U.S. dollar. Look at the exchange rate for several countries. Do you detect any overall pattern? Why might that be?
Download the file snapshots.pdf from www. stanford.edu/~chadj/snapshots.html and answer the following. (At the moment, the latest year in the data file is 2010. Over time, this year will advance, so please use the latest year available in the Country Snapshots file whenever the year 2010 appears in questions below.)
(a) What was the ratio of per capita income in each of the following countries to that in the United States in the year 2010: Ethiopia, Mexico, India, and Japan?
(b) Which country had the faster average annual growth rate of per capita GDP between 1960 and 2010, Botswana or China?
(c) Rank these countries in order of population: Bangladesh, Brazil, Indonesia, Nigeria, Russia, the United States.
(d) Which is larger as a share of GDP in most rich countries, investment or government purchases? What about in most poor countries?
(e) Exchange rates are reported as units of domestic currency (like the Japanese yen or the British pound) per U.S. dollar. Look at the exchange rate for several countries. Do you detect any overall pattern? Why might that be?
Related textbook solutions
Related questions
By manipulating the equations of the Solow model mathematically, it is possible to make more precise quantitative statements about the behavior of growth rates over time. For example, one way of qualifying the principle of transition dynamics is with the following equation.
g = 3 X (ln y* - ln y0) + 2
where g denotes the growth rate of a country over the next 10 years (in percentage points), 1n denotes the natural logarithm, y0 is the per capita GDP of a country in a steady-state (relative to the United States).
Of course, we don't usually know a country's steady-state position vis-Ã -vis of the United States. However, we do observe its growth rate. This question asks you to consider the facts from recent growth experiences in the table below.
| Country | Current rate | Steady-state | g |
| United States | 100 | 2 | |
| Ireland | 86 | 4 | |
| Russia | 21 | 5 | |
| Brazil | 17 | 2 | |
| China | 7 | 9 | |
| India | 5 | 6 | |
| Ethiopia | 1 | 5 |
Per capita Growth rate Per capita
GDP (US = 100), during GDP (US = 100),
Country 2010 2000-2010(%) steady state
The United States 100 2.0
Ireland 86 4.0
Russia 21 5.0
Brazil 17 2.0
China 7 9.0
India 5 6.0
Ethiopia 1 5.0
(a) Using those facts and the equation above, fill in the last column of the table. That is, offer a projection of where countries are headed in the long run.
(b) Provide a one-paragraph discussion of your results.
The empirical fit of the production model: The table below reports per capita GDP and capital per person in the year 2010 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 capita GDP and capital per person relative to the U.S. values.
(b) In columns 5, use the production model(with a capital exponent of 1/3) to compute predicted per capita GDP for each country 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.
|
Country |
In 2005 dollars |
Relative to the U.S. values (U.S. = 1) |
||||
|
Capital per person |
Per Capita GDP |
Capital per person |
Per capita GDP |
Predicted y* |
Implies TFP to match data |
|
|
Unites States |
124,162 |
41.365 |
1,000 |
1,000 |
1,000 |
1,000 |
|
Canada |
110,132 |
37,104 |
||||
|
France |
100,668 |
31,299 |
||||
|
Hong Kong |
136,360 |
38,685 |
||||
|
South Korea |
101,506 |
26,609 |
||||
|
Indonesia |
9,173 |
3,966 |
||||
|
Argentina |
29390 |
12,340 |
||||
|
Mexico |
35,887 |
11,939 |
||||
|
Kenya |
2,125 |
1,247 |
||||
|
Ethiopia |
977 |
680 |
||||
