GDP growth. Is economic growth in the developing world related to growth in the industrialized countries?

Here’s a scatterplot of the growth (in % of Gross Domestic Product) of the developing countries vs. the growth of developed countries for 180 countries as grouped by the World Bank (www.ers.usda.gov/data/macroeconomics).

Each point represents one of the years from 1970 to 2007.

The output of a regression analysis follows.

a) Check the assumptions and conditions for the linear model.

b) Explain the meaning of in this context.

c) What are the cases in this model?

Transcribed Image Text:

Annual GDP Growth of Developing Countries (%) co 6 5 4 3 2 1 2 3 4 5 6 Annual GDP Growth of Developed Countries (%) Dependent variable: GDP Growth Developing Countries R - 20.81% s-1.244 Variable Intercept GDP Growth Developed Countries Coefficient 3.46 0.433