ECN 310 Essay Three -China’s GDP Growth Decomposition: 1952-2005

Try to organize your answers to the five questions in a coherent way in an essay titled “China’s GDP Growth Decomposition: 1952-2005”. In other words, your essay should look like a paper that decomposes and analyzes China’s GDP growth rates during the period 1952-2005, not an assignment that answers five questions.
Read the requirements and use at least 5 sources for reference.

ECN 310 The Chinese Economy Essay Three Instructor: Mengxiao Liu 1 ECN 310 Essay Three China’s GDP Growth Decomposition: 1952-2005 Due Date: Midnight on Sunday, November 17th, 2019, via Turnitin on Blackboard The end of this document contains further instructions. Please read. Length requirement: 1500-2000 words. In Lecture 7 (slides 47-51), we studied a Cobb-Douglas production function:

Instructions I. How to Calculate Growth Rates
There are two ways to calculate the growth rate.
1. If you treat GDP, capital stock, labor, and human capital as continuous variables, their growth rates can be calculated using natural logs. For example, the formula for calculating the average GDP growth rates between 1952 and 1978 is
CgDP.1952-1,78 = (exp - l) X 100, (5)
where exp( ) is an exponential function, and ln( ) is the natural log function. For example, the excel file shows that China's GDP index in 1978 and 1952 are respectively 13.71 and 4.46, so GDP1978 = 13.71 and GDP1952 = 4.46. Substitute these two values into equation (5) to get GgDP 1952-1978 * 4.4%, which is consistent with the number reported in Table 1. The growth rate of the other variables (capital stock, labor, and human capital) can be calculated in a similar manner.
2. A simpler way to calculate the growth rates of GDP, capital stock, labor, and human capital is to calculate the annual growth rates of each variable, then take the average for a given time period.
For example, the excel file shows that China's GDP index between 1952 and 1957 are:Year GDP index1952 4.461953 4.901954 5.001955 5.351956 5.871957 6.11
^GDP,1952-1953 — (---1) X 100 — (-;——--1) X 100 ~ 0.099Year GDP growth rate1952-1953 0.0991953-1954 0.0221954-1955 0.0701955-1956 0.0971956-1957 0.041Average 0.066
China's GDP growth between 1952 and 1953 can be calculated as
''GDP1953 — GDP1952 N /4.90 — 4.46 -— — 1) X 100 = (-——
GDP1952 ' ' 4.46
Using the same formula to calculate China's GDP growth rates between 1952 and 1957:2The average growth rate between 1952-1957 is simply 0.066, or 6.6%, which is roughly consistent with the number reported in Table 1.
Economically, the two methods are equivalent, but mathematically they may generate slightly different numbers. Since the authors used the first method to calculate Table 1, the first method generates identical numbers as Table 1. The second method generates numbers that are slightly different from Table 1. You can use either method to calculate the growth rates.2 If you need more training on calculating growth rates in excel, watch the following YouTube video:https://youtu(dot)be/mHoSPOa4dSg.