Cosider the table below (a) Assuming no difference in TFP (that is, ignore the last column for this sub-question)
or the rate of depreciation across countries, use the data in the table to predict the
ratio of per capita GDP in each country relative to that in the United States in steady
state.
(b) Now do the same exercise assuming TFP is given by the levels in the last column.
Briefly discuss the differences you find in these two approaches.
Country
Per capita GDP, 2019, relative to the U.S.
Investment rate s (%)
TFP ( A)
Predicted per y,/*u.s.. capita GDP (A/Au.s)x to the U.S. ($/sus)
United States
1.000
23.5
0001
1.000
1.000
Switzerland
1.151
28.8
1.052
1.1070
1.194
Hong Kong
0.741
27.0
0.772
1.071
0.727
Canada
0.776
25.1
0.811
1.033
0.754
France Japan
0.709
24.1 28.1 36.0 15.9
0.771 0.752
1.012
0.685
0.734
1.093
0.713
South Korea
0.666
0.713
1.237
0.745
Argentina Mexico % Thailand
0.300
0.532
0.822
0.319
0.311
19.6 27.7
0.502
0.913
0.324
0.287
0.486
1.085
0.367
India
0.117
24.7
0.270
1.025
0.143
Kenya Ethiopia
0.056 0.029
11.9 15.7
0.194
0.711
0.060
0.114
0.817
0.031