Use the Penn World Table, accessible at http://febpwt.webhosting.rug.nl/Dmn/AggregateXs/ VariableCodeSelect, to study comovements between the components of GDP
Question:
Use the Penn World Table, accessible at http://febpwt.webhosting.rug.nl/Dmn/AggregateXs/
VariableCodeSelect, to study comovements between the components of GDP and real GDP.
Pick any economy and download its data on real GDP at constant national prices, capital stock at constant national prices, total factor productivity at constant national prices, real consumption at constant national prices, and real domestic absorption at constant national prices from 1950 to present. First, calculate the annual growth rates of all these measures.
Next, plot the growth rate of each of these variables with the annual growth rate of real GDP over time. Finally, examine whether the growth rate of each of the variables is positively correlated, negatively correlated, or uncorrelated with the growth rate of real GDP.
Step by Step Answer: