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22 August, 10:02

Over the last 50 years in the US, GDP per person has grown at approximately 1% per year, while capital per person has been accumulating at around 0.5% per year. Assume a capital share of 0.3. What is the growth rate of the Solow residual?

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  1. 22 August, 12:03
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    Growth rate of GDP per worker = growth rate of technology + capital share X growth rate of capital per worker

    0.01 = growth rate of solow residual + 0.3*0.005

    growth rate of solow residual = 0.0085 = 8.5%
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Home » Business » Over the last 50 years in the US, GDP per person has grown at approximately 1% per year, while capital per person has been accumulating at around 0.5% per year. Assume a capital share of 0.3. What is the growth rate of the Solow residual?
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