Economics

1. Choose a relatively high income country that you would like to examine. (This economy should have a GDP per capita value greater than $20,000 in 2010 or 2007 or thereabouts.) For this country detail the growth of labor productivity (GDP per capita) over the period 1950-2010 (or as closely as possible to these dates depending on data availability). You should make sure that you show the following information: a. Make a figure showing the growth of labor productivity over time (label all axes etc) b. Report the start year and end year values of labor productivity c. Calculate and show the simple growth rate of labor productivity d. Calculate the annual average compound rate of growth of labor productivity in the country chosen, for the study period as a whole and for any important sub-periods.
2. Choose a second country that has a relatively low value of GDP per capita (say less than $10,000 in 2010) and discuss the changes in this country’s labor productivity over the same time period (1950-2010) or as close to that period as possible. (Repeat the analysis above (1a-1d) for your second country. Note that data are unavailable for some countries until the 1960s or even more recently.)
3. Compare the productivity performance of the two countries that you have chosen to study. Compare the findings from questions 1 and 2. You might plot labor productivity in both countries on a third figure and explore whether labor productivity is converging or diverging between your two countries.

DATA SOURCES:
You have two possibilities in terms of data sources, both using the Penn World Tables data, from different websites. The first of these is the easiest to use but only runs up to 2007. The second includes data that is more recent but is a little trickier to work with:
1. Use the PWT version 6.3 from http://datacentre.chass.utoronto.ca/pwt/
From the main page click on the button for Alphabetical List of Countries. Choose your first country, then grab your variable of interest (GDP per capita – see hint 1 below) and choose a timeframe (1950-2007). Export your output in a form that you can ready easily (say Excel) and then copy and paste as needed. (You do not need to enter any data by hand.)
2. Use the PWT version 7.1 from http://www.rug.nl/research/ggdc/data/pwt/pwt-7.1
From the main page you click on complete data download and get all the PWT data for every country and every year. These data go up to 2010. You can extract the data using any zip file software. Open the data in Excel and you will see countries, dates and variables. Again you only need data for GDP per capita (see hint 1 below).

HINTS:
1. Use the variable Real GDP per capita (Laspeyres) (rgdpl2) from PWT 6.3. This is GDP per capita adjusted for inflation (2005 is the base year.)
2. Write your assignment as a formal essay with brief introduction, main body of argument, and conclusion.
3. If you have no idea how to produce a figure electronically EXCEL is your best bet.
4. No information regarding the history of the economies you are examining is required. Just the facts of growth!
5. There are other sites for PWT data – the UPenn link doesn’t appear to be working. You could try UC Davis PWT.
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