Economics Solow Model

For this question, please use data from 2011 for all countries in the Penn World Tables https://www.rug.nl/ggdc/productivity/pwt/.

Using Excel, plot the following:

(a) Scatter plot with GDP per capita (“Output-side real GDP at chained PPPs (in mil. 2011US$)” divided by population) in the vertical axis and the capital per capita (“Capital stock at current PPPs (in mil. 2011US$)” divided by population) in the horizontal axis.

(b) Scatter plot with GDP per capita (“Output-side real GDP at chained PPPs (in mil. 2011US$)” divided by population) in the vertical axis and the “Human Capital Index” in the horizontal axis.

Briefly comment on these graphs, and discuss their relationships with the Solow Model.

Solution: