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Assignment Instructions: The objective of this assignment is to provide some informal evidence (or lack of evidence) on the convergence hypothesis, a key issue in
Assignment Instructions: The objective of this assignment is to provide some informal evidence (or lack of evidence) on the "convergence hypothesis," a key issue in growth and development theory, as discussed in the lecture slides. Collect GDP-related data on five developing economies from the World Development Indicators (WDI) http:/databank.worldbank.org/data/views/variableSelection/selectvariables.aspx?source=world-development-indicators E> for the following years: 1990, 2000, 2010, and the most recent year you can find (in U.S. dollars): . Nominal GDP per capita (or GDP per capita, current US $) . Real GDP per capita (or GDP per capita, in constant 2010 US $, or any other base year (e.g., 2009 or 2015) available). Make sure to use the same base year for all countries. The purpose of putting values in constant dollars or constant prices is to remove the effects of inflation/deflation. . International price-adjusted GDP per capita (use GDP per capita, Purchasing Power Parity OR constant 2011 international $, whichever base year is available.) Again, for purposes of comparability, use the same base year for all countries.For each country and for each measure of income per capita, calculate the growth rates between 1990-2000, 2000-2010, and 2010-recent year (available) and display in a table (countries in rows and growth rates in columns). Calculate the overall growth rate of Real GDP per capita from 1990 to the most recent year for each country. Next, plot this growth rate of Real GDP per capita (over the period 1990 - recent year) against the level of Real GDP per capita in 1990. Does the plot show any evidence of convergence? That is, do you observe any 'catching up\"? What difference do PPP adjustments make to the analysis? Next, collect data on the Human Development Index (HDI) from the UN Development Program for 1990 and the most recent year you can obtain [http:/hdr.undp.org/en/content/human-development-index-hdi = ] for those same 5 countries. Using HDI instead of GDP per capita, again calculate the growth rates of HDI from 1990 - most recent year and plot them against the level of HDI in 1990. Does the HDI provide consistent estimates of the growth rate and convergence as GDP per capita? Since this is the first Data Assignment, a sample analysis is provided. Please see the Excel file below (which contains a minor difference; namely, it uses a different sample period). The Excel file was used just for data management and calculations, and to help you get started. In your own report, present your evidence -- tables and/or charts -- along with some (brief) commentary in a Word document (and convert to pdf, if possible). Attach your Excel sheet to show your underlying derivations, calculations, and other scratch work. See the sample report done by a previous student (Sample Report for Assn #1.pdf , Sample Answer Data Assn #1.xlsx 1 ). The length of the discussion (commentary) in your report should the equivalent of one single-spaced page. N.B. You need not complete your report exactly the way the former student did; feel free to apply your own creativity and style. Past reports are shown only to ease uncertainty that students have about a new course. [Addendum: The above link to UNDP leads you to the latest Human Development Report. However, it may not contain HDI data for 1990. You will need to consult the 2014 or earlier HD Reports. An excel spreadsheet from the 2014 report is attached. UNDP Human Dev Report Data 2014.xlsx. 4 Alternatively, you can choose a later initial year, like 1995.] Note 1: If data are missing for too many periods, choose a different developing country. Note 2: Remember to include a brief introduction to your Report. Some students merely begin with tables and charts and commentary. Treat this as a 'Report' Begin by discussing the purpose of the report, your strategy for providing explanations or solutions, and your findings up front. The sample report by a former student is very good, but you need not emulate it exactly. You could add your own creative ideas and expressions (say discussing the policy implications or linking your findings to the readings), but make sure you don't exceed the maximum page length. Note 3: A short cut to calculating the growth rate of a variable Y between two periods (t and t+T) is g=In Y(t+T) - In Y(t), where In denotes the natural logarithm
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