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Homework – Growth AccountingThe homework asks you to perform growth accounting exercise for threecountries of your choice using the Penn World Tables. The three countriesshould include a rich country (choose between Canada, France, Germany, Japan,Italy, U.K., and U.S.), a Latin American country (choose between Argentina,Brazil, Chile, Colombia, Mexico, Peru, and Venezuela), and a Asian growthmiracle (choosing between China, Hong Kong, Singapore, South Korea, andTaiwan). Penn World Tables provide data on output, capital, labor, and factorshares to do the exercise. Since we are compare the same country over time,it’s better to use capital and output denominated in national constant prices(variables rkna and rgdpna). Use average factor shares over the accountingperiod in the exercise. Your accounting exercise should follow these steps:1. labor input can be measured as a product of employment (emp) and average hours worked (avh). Use this measure to perform the accounting exercise.2. The deficiency of the previous labor input measure is that it ignores thechanges in worker quality over time. PWT provide a measure of human capital(hc) that can be used to adjust for that. labor input now can be measured asa product of employment , average hours worked, and human capital. Use thenew measure to perform the accounting exercise. How is the result differ fromthe previous one? Do you think it’s important to account for quality changes?3. Try to look at the different periods for each country. Compare betweencountries and over time, comment on your findings and try to link them to whatthe countries actually experienced. 1

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