# PS2 - variables involved Savings Rate v/s Income per capita...

This preview shows pages 1–2. Sign up to view the full content.

Part II Problem 1 Domestic savings as a percentage of GDP in 2000: Average: 16.624 Minimum: -32.406 ( Eritrea ) Maximum:74.047 (Ecuatorial Guinea) Through out the data we can notice that there is a huge gap in savings throughout the world in 2000. The maximum is over 4 times the average, while the minimum is really low compared to the average with a negative value. Problem 2 By observing the scatter plot shown below it is possible to see a relationship between the savings rate and the GDP per capita, thought they are not fully correlated. There are same countries with the same income per capita that save a lot and others that save very little. This specially comes to notice when we look at the countries with the lowest GDP’s per capita Where it is more difficult to see a relationship between the two

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: variables involved. Savings Rate v/s Income per capita in 2000-40-20 20 40 60 80 10000 20000 30000 40000 50000 GDP per capita Savings Rate Problem 3 The graph below shows to some extent that countries with a high growth rate have also a large average saving rate, so the Solow model is indeed supported by this graph. This is because the model sates that countries with low savings rates should have lower growth rates so they reach their steady state lower. Average Savings rates from 1960 and 2000 v/s Growth rate-30-20-10 10 20 30 40 50-0,04-0,02 0,02 0,04 0,06 0,08 Growth Rate Average Saving rate from 1690 and 2000...
View Full Document

## This note was uploaded on 03/01/2009 for the course ECON 114 taught by Professor Cindybenelli during the Spring '08 term at UCSB.

### Page1 / 2

PS2 - variables involved Savings Rate v/s Income per capita...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online