Questions for tutorial “Sources of Growth”
1. What is the main aim of growth accounting?
2. What are the main elements in a growth accounting exercise?
3. What is the relationship between GDP per capita and labor productivity (GDP per
worker)? Why is it important to distinguish the two?
(Hint: express GDP per capita (i.e. GDP divided by population) as GDP per worker
times the share of workers in the population)
Bosworth and Collins on India and China
4. What are the production factor inputs covered in the growth accounting exercise? In
your answer, distinguish between labor quantity and labor quality.
5. For what variables do the authors have data?
6. What is the difference in the proximate sources of growth between India and China
during the period 1978-04 (Table 1)?
7. What was the growth rate of physical capital per worker in China during 1978-04?
And what was its contribution to output per worker growth?
8. What do they assume regarding the output elasticity of capital?
9. Are the result in Table (78-04 period results) sensitive to this assumption? Recalculate
Chinese Total Factor productivity growth when alpha is 0.6.
10. Look at Table 4: what are the main differences between China and India in terms of
sectoral structure?
11. Look at the growth accounting findings in Table 3: what are the main differences
between China and India in total factor productivity growth in industry and services?
12. The article discusses the prospects for future growth in China and India. How is that
linked to the growth accounting findings?
(Hint: relate the variables from the growth accounting analysis to the predictions the
authors make in the concluding remarks)
Nelson and Pack on endogenous growth
13. What are the main characteristics of the Nelson and Pack model of economic growth?
(Note: discuss the model in your answer, so discuss in words the key model
equations!)
14. Based on the model argue what happens to the speed of GDP per capita growth when:
(a) the response to profit opportunities, e, increases; (b) productivity in the modern
sector declines (c) the price of labor in the craft sector, w, rises.
15. Does the cross-country growth regression, see equation 11, vindicate the Solow
model’s explanation of growth in East Asia?
(Hint: relate the variables in equation 11 to the variables in the growth accounting
analysis and examine the outcomes shown in table 4)
16. How do the main drivers of the Asian miracle according to accumulationists and
assimilationists compare and contrast to each other?