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CPWG For 1950-1973 2. CPWG For 1973-1998

This document discusses how to calculate capital per worker growth (CPWG) using an equation that relates it to the growth rates of capital and the workforce. It provides examples of calculating CPWG for the US and Japan over two time periods by plugging the growth rate values for capital and the workforce into the CPWG equation. CPWG is noted to represent the contribution of capital per worker to 1% growth in labor productivity.

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SockYii Chua
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47 views1 page

CPWG For 1950-1973 2. CPWG For 1973-1998

This document discusses how to calculate capital per worker growth (CPWG) using an equation that relates it to the growth rates of capital and the workforce. It provides examples of calculating CPWG for the US and Japan over two time periods by plugging the growth rate values for capital and the workforce into the CPWG equation. CPWG is noted to represent the contribution of capital per worker to 1% growth in labor productivity.

Uploaded by

SockYii Chua
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Thank you Jasmine.

By drawing reference to the General Production function, we


can manipulate and derive this Growth Per Capita Output equation,
-

Given this equation (points to slide), labor productivity growth or per


capita output growth (Y/N) can be attributed to Total Factor Productivity
growth and Capital per worker growth.

From this equation, we see that capital per worker growth (or CPWG for short) is
equal to K/K N/N. Thus to calculate the respective countrys capital per worker
growth at different time periods, we only need to plug the values from the table into
the above formula, since the values are growth rates and not absolute values.
Firstly, for USA,

1. CPWG for 1950-1973

= 3.27% - 1.45%
= 1.82%

2. CPWG for 1973-1998

= 3.23%-0.98%
= 2.25%

Next, for Japan,


1.

CPWG for 1950-1973

= 9.18% - 1.15%
= 8.03%

2.

CPWG for 1973-1998

= 6.47% - 0.61%
= 5.86%

One thing no note is that our team did not multiply each final value we get by
alpha, as it only represents how much CPWG contributes to 1% growth in labor
productivity growth. With that, Ill pass the time to Clement to continue. Thankyou!

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