Economic Growth & Development: Growth Accounting, the Solow Model, Convergence & PPP

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Turn eleven years of Aldoria's GDP and population into growth rates, separate total growth from growth per person, compute the compound growth rate over the decade and compare the rule-of-70 doubling time with the exact LN formula.
• Compute output for six fictional economies from productivity, capital and workers, rewrite it per worker, and calculate the marginal products of capital and labour to see why capital earns more where it is scarce.
• Write the Solow law of motion for capital per worker, let it run for 40 years, calculate the analytic steady state and check how close the simulation gets and how long it takes to reach 75 % of it.
• Compute the steady-state capital, output and consumption per worker for saving rates from 5 % to 70 %, find the golden-rule consumption level and draw the hump-shaped curve of consumption against the saving rate.
• Split twenty years of Bremonia's GDP growth into the contributions of capital, labour and total factor productivity, period by period and for the whole span, using log growth rates that add up exactly.
• Calculate how many years a poorer country needs to catch up, measure the convergence slope across ten fictional countries with SLOPE on growth against log initial income, and use the fitted line to predict growth for a new country.
• Convert six countries' incomes at market rates and at purchasing-power parity, compute price level indices, normalise health, education and income onto 0–1 scales and combine them into a development index with the geometric mean.
• Project three age groups 25 years ahead, calculate total and old-age dependency ratios, and show how an ageing population slows the growth of income per person even while productivity keeps rising.