Problem 4 After 10 years, a committee is established to evaluate the performance of the Norwegian PPE industry

Problem 4 After 10 years, a committee is established to evaluate the performance of the Norwegian PPE industry. They are presented with the following data: 2021 2026 2031 Output Employment Capital 100 15 10 300 30 20 600 60 60 a) Assume that the production function is Y AKL1-a, where a = 1/2, Y is output, A is productivity, K is capital and L is labor. Derive the method of growth accounting and calculate 2021-2026 and 2026-2031 productivity growth. b) After publishing the initial findings, the committee is criticized because they did not take into account human capital when calculating productiv- ity. Show mathematically how including human capital alters the growth accounting method. Do you think the findings for productivity in a) are too big or too small?