(i) What were the main two components of the gain in labor productivity from 1901 to 2016? What was the proportional contribution of each?(ii) How does ‘capital deepening’ occur?(iii) What causes ‘multifactor productivity’ to increase? Considering the graphic below from the Australian Productivity Commission, answer thefollowing questions.Figure 6Productivity explains the majority of GDP per capita growthsince FederationGDP per capita (2010 USD) per weeka in 1901 and 2016 (quoted in 2010USD), and the dollar contributions due to price effectsb, labour utilisationc,capital deepeningd and MFP1000900800700600+503500861400300+259200+39-50100111GDPPrice effectsLabourutilisationCapitaldeepening ProductivityMultifactorGDPper capita(1901)per capita(2016)a GDP per capita is quoted in weekly terms for tractability. b Price effects are the portion of growth in realGDP (when converted using current purchasing power parity (PPP)) that is not explained by growth in realGDP (when converted using constant PPP). These include the effects of the terms of trade. Č The portionof GDP per capita growth not accounted for by labour productivity growth. d The portion of labour productivitygrowth not accounted for by MFP growth.Sources: Commission estimates based on Bergeaud et al. (2017) and Bolt et al. (2018).(i)What were the two main components of the gain in labour productivity from 1901 to2016? What was the proportional contribution of each? Show your calculations.GDP per capita (2010 USD)

The labor productivity shows how much more output can be produced by the level of labor resources…

Considering the graphic below from the Australian Productivity Commission, answer the following questions. Figure 6 Productivity explains the majority of GDP per capita growth since Federation GDP per capita (2010 USD) per weeka in 1901 and 2016 (quoted in 2010 USD), and the dollar contributions due to price effectsb, labour utilisationº, capital deepeningd and MFP 1000 900 800 700 600 +503 500 861 400 A 300 +259 200 +39 -50 100 111 GDP Price effects Labour utilisation Capital Multifactor GDP per capita (1901) deepening Productivity per capita (2016) a GDP per capita is quoted in weekly terms for tractability. b Price effects are the portion of growth in real GDP (when converted using current purchasing power parity (PPP)) that is not explained by growth in real GDP (when converted using constant PPP). These include the effects of the terms of trade. č The portion of GDP per capita growth not accounted for by labour productivity growth. d The portion of labour productivity growth not accounted for by MFP growth. Sources: Commission estimates based on Bergeaud et al. (2017) and Bolt et al. (2018). (i) What were the two main components of the gain in labour productivity from 1901 to 2016? What was the proportional contribution of each? Show your calculations. GDP per capita (2010 USD)

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 4P