posted by Pale on .
Consider a country in which capital per hour of work from 1950 to 1973 grew by 3 percent per year and output per hour of work grew by about 3 percent per year. Suppose that from 1973 to 1991, capital per hour of work did not grow at all and output per hour of work grow by about 1 percent per year. How much of the slowdown in productivity (output per hour of work) growth was due to technological change? Explain. (Assume that the coefficient on capital in the growth accounting formula is 1/3).