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Continuous Growth Rates I took annual U.S. nominal GDP and fitted the data to an exponential function of the type, GDP = ae bt ,

Continuous Growth Rates

I took annual U.S. nominal GDP and fitted the data to an exponential function of the type,

GDP = aebt , where t is annual date from 1948 - 2017

Taking natural logarithms,

Ln(GDP) = ln(a) + bt

I used linear regression analysis to estimate b = 0.032

  1. Interpret b
  2. Given that GDP in 2015 is $18.22 trill., and using your interpretation of b, what would be your prediction of GDP in 2016?
  3. In 2017?

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