代写ECON33001 MACROECONOMICS OF DEVELOPMENT Semester One, 2024代做Python编程

ECON33001

MACROECONOMICS OF DEVELOPMENT

Semester One, 2024

1.  Consider the following production function for human capital

h(Sj, Qj ) = Qj exp (μjS j )

where Sj is the years of schooling in country j, Qj is quality of schooling in country j.

To carry out development accounting we need an estimate of human capital.  We have sample of migrants from a number of countries working in the US. We also have sample

of workers for the same countries working in their home country. The samples of workers working in the US and working at home consist of different workers.  The information about each worker in the samples include wages, years of schooling and a set of wage relevant characteristics. However, we do not observe school quality in country j, Qj.

(a)  [12 MARKS]  To construct human capital we need to estimate the returns to years schooling, μj.  Explain why it is crucial for estimating the returns to schooling to assume that different types of human capital are perfect substitutes in the production function.

(b)  [12 MARKS]  How do we estimate on the data the returns to years of schooling?

(c)  [12 MARKS]  Suppose we want estimate the return to years of schooling on all of our samples. How μj can be linked to the above production function for human capital?

(d)  [14 MARKS]  What can be learn from (c) about the estimation of Qj? Is there an issue with estimation of Qj?

2.  Consider a two–sector version of the growth model with agricultural and manufactured goods.   Time is discrete and runs forever and there is a continuum of measure one of identical households. The utility function is given by

where the consumption aggregator is

and µ and C¯ are positive constants. The production functions for agricultural and manufac-

tured goods take the form.

where T = 1 island, Lat + Lmt = 1 is total labor, and At is total factor productivity. At grows at a constant factor γ > 1.

(a)  [12 MARKS]  Argue that A0  >C¯ is a necessary condition for an interior equilibrium, thus, an equilibrium with positive employment in both sectors.

(b)  [12 MARKS]  Derive the equilibrium conditions, and show that along the equilibrium path, laboris reallocated from agriculture to manufacturing (“structural transforma-tion”).  Provide intuition for why structural transformation takes place in this econ- omy.

(c)  [12 MARKS]  Show that the growth rate of real GDP, Yt = Pt Cat + Cmt , is increasing over time. Provide the intuition for why that is the case.

(d)  [14 MARKS]  Land owners are often opposed to structural transformation.  Suggest how to modify this model so that it can be used to provide an explanation for their opposition.