DataYEARGDP = Y(t)CAP = K(t)EMP = L(t)log[Y(t+1)/Y(t)]0.4(K(t+1)/K(t))0.6*log(L(t+1)/L(t))log(A(t+1)/A(t))Solow Residualk(t) = K(t)/L(t)k(t) = k(t)-k(t-1)k(t) = 0.35*A*(k^(3/4))-(0.1+0.01)*k(t)195021818766328850.545282139.7652599267-1.1470429619195123577166808344.0479250.03366142550.01268666160.01478191270.00619285121.0143617195142.06247261352.2972126868-1.2247139779195224537367050130.0489030.0173363440.00606225370.00526402840.00601006191.0139348767144.16559311292.1031204994-1.2964420755195325689127307389.0503040.01992139270.00622604080.00736021070.00633514121.0146941142145.26457140591.098978293-1.3341551685195425543887567169.049087-0.00246236210.0060684825-0.0063816177-0.00214922690.9950634471154.15831075448.8937393485-1.6450146798195527363907874742.0507370.02989112930.00692116020.00861497630.01435499281.0336059311155.20708752981.0487767754-1.6823158746195627947478177633.5524680.0091645040.00655652350.0087418352-0.00613385480.9859755493155.85944766330.6523601335-1.7055845054195728535298470444.0529570.00903979190.00611141310.00241731880.000511061.0011774519159.94946843674.0900207733-1.8526141682195828326228730865.051425-0.00319366670.005260439-0.0076494445-0.00080466130.9981489143169.77860962579.829141189-2.213735131195930280779042303.0533720.02897829070.00608871310.00968350620.01320607141.0308751514169.4203514952-0.3582581305-2.2003864275196031057619410647.0542940.01100111760.00693617090.0044630167-0.00039807010.9990838297173.32756842383.9072169286-2.3467060734196131851029719826.0541030.01095531270.005615603-0.00091829480.00625800451.0145139064179.65410420866.3265357849-2.58698484161962337987810072993.0556590.02577767950.00620001670.00738843120.01218923161.028464325180.97689502151.3227908128-2.6377345661963352706610465713.0567670.01851256220.00664411550.00513632650.00673212021.0156220476184.36262265053.385727629-2.76841453761964373049610911239.0583950.02435299220.00724209910.00736783160.00974306151.0226877679186.85228187342.489659223-2.86521667741965397289311412346.0608790.02734028990.00780034460.01085510840.00868483691.0201988671187.45948520840.6072033349-2.88891545731966423494811935598.0640250.02774121350.00778770110.01312924620.00682426611.015837559186.4208980867-1.0385871217-2.84840130021967435118812414244.0659350.0117597660.00683043760.007659854-0.00273052570.9937324558188.28003336621.8591352795-2.92099635031968456472412920394.0680270.02080667550.00694219210.0081391850.00572529841.0132702654189.93038058421.650347218-2.98571131911969470793113439002.0705150.01341556550.00683650450.0093601148-0.00278105370.9936168466190.58359214350.6532115593-3.01139584421970471766713899786.0710070.00089719350.00585643810.0018117925-0.00677103710.9845300196195.75233427695.1687421334-3.21601357641971487301014394300.0713310.014070020.00607297440.00118628890.00681075671.0158059603201.79585313546.0435188585-3.45829310311972512877414962213.0737880.02221625960.00672211330.0088244560.00666969041.0154760626202.77298476720.9771316318-3.49776458691973541820615587390.0769010.02384195060.00711102750.01076774890.00596317421.0138254153202.6942432478-0.0787415194-3.49458076291974539018716120947.078383-0.00225168060.00584685940.0049739365-0.01307247650.9703480189205.66892055682.9746773089-3.61522575291975537952716524117.077071-0.00085974070.0042910845-0.0043985325-0.00075229270.9982692815214.40122743968.7323068829-3.9736427831976566927516979164.0795070.02278343230.00471921670.00810862360.00995559191.0231883625213.5555863006-0.8456411391-3.93866167071977593055117527076.0826000.01956752110.00551726670.00994480830.00410544611.0094979611212.1922033898-1.3633829107-3.882384631978626039018172714.0868290.02350634410.00628412880.01301085120.00421136411.0097441926209.2931393889-2.8990640009-3.76322069831979645921118841772.0899360.01357808260.0062807810.0091612612-0.00186395950.9957172717209.50200142320.2088620343-3.77178280341980644341119392764.090531-0.00106363750.00500718730.0017182498-0.00778907450.9822248681214.21130883344.7093074102-3.96578154711981661064019914240.0912920.0111276730.00460960980.00218124240.00433682081.0100359244218.13784340363.9265345701-4.12889404871982648431320307654.089684-0.00837953690.0033984074-0.0046306509-0.00714729340.9836774295226.4356406948.2977972904-4.47753159181983678470520761348.0902890.0196669990.00383831710.00175192380.01407675811.0329439542229.94327105183.5076303579-4.62646792541984727722921386624.0945430.03043507230.00515467440.01199672160.01328367631.0310593769226.210549697-3.7327213549-4.46800527581985758569922054654.0975290.01802956440.00534320590.00810263530.00458372321.010610307226.1343190231-0.0762306739-4.46477989511986785207222698254.0994970.01498866730.00499688110.0052057290.00478605721.0110812512228.13003407141.9957150483-4.54936298711987812393723326776.01021150.01478227360.0047449070.00676773330.00326963341.0075570203228.43633158690.3062975156-4.56237077151988846544723961024.01053750.01788334820.00466026210.00818882760.00503425861.0116592541227.3881281139-1.0482034731-4.51788467031989877697824600122.01080470.01569511470.00457275470.00652507520.00459728491.0106418657227.67982452080.2916964069-4.53025618191990894543925188296.01095300.00825664880.00410461090.00355222490.0005998131.0013820746229.96709577282.287271252-4.62748264181991893888325652820.0108435-0.00031840570.0031745302-0.0026181623-0.00087477360.9979877866236.57324664556.6061508726-4.91043052771992925666126160804.01087980.01517110630.00340638930.00087085690.01089386011.0254012915240.45298626813.8797396227-5.07804943711993951077426752074.01109370.01176150270.0038825480.00507330320.00280565141.0064811636241.14654263230.6935563642-5.1081241321994989470227424690.01143900.01718685720.0043137080.00798698560.00488616361.0113143357239.7472681178-1.3992745145-5.047481591819951016369028155274.01174160.01164869120.00456721240.00680353270.00027794611.0006401994239.79077808820.0435099703-5.049365204619961054948828985402.01198270.01617997220.00504782790.00529644310.00583570111.0135278833241.89374681832.1029687302-5.140562327219971102287929882946.01229420.01906365770.00529763280.00668735250.00707867241.0164328028243.06539669111.1716498728-5.191504154319981151341730879060.01261490.01890919440.00569626450.0067101230.00650280691.0150859271244.78243981321.7170431221-5.266328397819991207135531958800.01292400.02055178760.0059705570.00630788230.00827334821.019232699247.28257505422.5001352409-5.375634589620001256516433077686.01320300.01741213930.00597786250.00556540440.00586887241.0136052993250.5315913053.2490162508-5.518306207920011268442834042272.01320800.00410272630.00499336690.0000986622-0.00098930280.9977246387257.73979406427.2082027592-5.837300079820021290971734851148.01306280.00764583440.0040794204-0.00288046960.00644688361.0149552248266.79691949669.0571254324-6.242784592620031327004335675240.01303150.01195560820.004059926-0.00062512150.00852080361.0198136101273.76157771556.9646582189-6.557997556620041377398836589712.01317320.01618737010.00439683510.00281812630.00897240881.0208746244277.75872225433.9971445387-6.740201101220051423555737569048.01339970.01431476430.00458847960.00444227390.00528401091.0122412023280.37230684272.6135845884-6.859838265120061461519638524884.01364030.01143017930.00436445980.00463730810.00242841141.0056072861282.43428663592.0619797932-6.954501613820071487678739387952.01379350.00770450110.00384882410.00291033420.00094534271.0021791029285.55444230983.1201556739-7.098202235620081483355740057600.0137170-0.00126384020.0029286102-0.0014492043-0.00274324610.99370335292.02886928636.4744269765-7.398113893220091441794340347576.0131220-0.01234200050.0012530091-0.0115554631-0.00203954650.9953147806307.480384087815.4515148015-8.122961656220101477935040615356.01302720.01075202980.0011491264-0.00188937160.01149227511.0268151673311.77348931474.2931052269-8.326549891120111505237340926444.01318490.00794963760.00132549890.00313545570.00348868291.0080653404310.4039014327-1.369587882-8.2615000532Sample Mean:1.0090351576Sample Variance:0.0001767461

Plots

Plots0.00619285120.00601006190.0063351412-0.00214922690.0143549928-0.00613385480.00051106-0.00080466130.0132060714-0.00039807010.00625800450.01218923160.00673212020.00974306150.00868483690.0068242661-0.00273052570.0057252984-0.0027810537-0.00677103710.00681075670.00666969040.0059631742-0.0130724765-0.00075229270.00995559190.00410544610.0042113641-0.0018639595-0.00778907450.0043368208-0.00714729340.01407675810.01328367630.00458372320.00478605720.00326963340.00503425860.00459728490.000599813-0.00087477360.01089386010.00280565140.00488616360.00027794610.00583570110.00707867240.00650280690.00827334820.0058688724-0.00098930280.00644688360.00852080360.00897240880.00528401090.00242841140.0009453427-0.0027432461-0.00203954650.01149227510.0034886829

log(Solow Residual)

Answers-1.22471397792.2972126868-1.29644207552.1031204994-1.33415516851.098978293-1.64501467988.8937393485-1.68231587461.0487767754-1.70558450540.6523601335-1.85261416824.0900207733-2.2137351319.829141189-2.2003864275-0.3582581305-2.34670607343.9072169286-2.58698484166.3265357849-2.6377345661.3227908128-2.76841453763.385727629-2.86521667742.489659223-2.88891545730.6072033349-2.8484013002-1.0385871217-2.92099635031.8591352795-2.98571131911.650347218-3.01139584420.6532115593-3.21601357645.1687421334-3.45829310316.0435188585-3.49776458690.9771316318-3.4945807629-0.0787415194-3.61522575292.9746773089-3.9736427838.7323068829-3.9386616707-0.8456411391-3.88238463-1.3633829107-3.7632206983-2.8990640009-3.77178280340.2088620343-3.96578154714.7093074102-4.12889404873.9265345701-4.47753159188.2977972904-4.62646792543.5076303579-4.4680052758-3.7327213549-4.4647798951-0.0762306739-4.54936298711.9957150483-4.56237077150.3062975156-4.5178846703-1.0482034731-4.53025618190.2916964069-4.62748264182.287271252-4.91043052776.6061508726-5.07804943713.8797396227-5.1081241320.6935563642-5.0474815918-1.3992745145-5.04936520460.0435099703-5.14056232722.1029687302-5.19150415431.1716498728-5.26632839781.7170431221-5.37563458962.5001352409-5.51830620793.2490162508-5.83730007987.2082027592-6.24278459269.0571254324-6.55799755666.9646582189-6.74020110123.9971445387-6.85983826512.6135845884-6.95450161382.0619797932-7.09820223563.1201556739-7.39811389326.4744269765-8.122961656215.4515148015-8.32654989114.2931052269-8.2615000532-1.369587882

motion of physical capitaldelta(k(t))

Problem Set 5(c)The movements of the Solow residual represents shocks to total factor productivity of an economy. Thus it may characterized by productivity slowdowns and growths of productivity in an economy. For example, a slowdown in productivity might result from increasing costs of energy or switching to a new technology while growth in productivity might be connected with increasing productivities of input factors labor and capital (e.g. labor productivity increases when the education of labor force is improving, capital productivity increases when a new technology brings efficiency advances)