One Child Policy

    In addition to liberalizing its economy under the Reform and Opening Up policies of Deng Xiaoping, China also experienced a profound change in its demographic patterns in part driven by the imposition of the One Child policy. In this section, we adjust the model from question 2 to account for these demographic changes. (a) (5 points) In sheet 3, construct an alternative path for Chinese population (column B, rows 15 to 110) as follows. For 1955 to 2019, use the population growth data from Penn World tables. Then, from 2019 to 2050, assume a constant growth rate of -1% (n = -0.01). Based on the Penn World tables data what was the average growth rate of China’s population each of the 20-year periods 1955-1975, 1975-1995, and 1995-2015? (Note: columns C, D, E, and F should update automatically when you fill in column B). (b) (5 points) Construct the deduced variables in columns G through M using the new path for population growth. How does the new path for population growth affect the growth rate of total output? What about the growth rate of output per worker? For both variables, is there a permanent (i.e. on the balanced growth path) effect to the growth rate from this change in population growth? (c) (10 points) Using the growth accounting procedure, what is the contribution of capital, labor, and technology growth to Chinese growth in questions 2 and 3. Please fill in these values in columns O, P, and Q for sheets 2a and 3. Explain the differences