HW 1 - 79%“ 6722 CPI for period 1979-2010 Annual 1A 72.6...

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Unformatted text preview: ' 79%“ 6722.... CPI for period 1979-2010 Annual 1A) 72.6 1980 82.4 1981 90.9 1982 96.5 1983 99.6 1984 103.9 1985 107.6 1986 109.6 1987 113.6 1988 118.3 1989 124.0 1990 130.7 1991 136.2 1992 140.3 1993 144.5 1994 148.2 1995 152.4 1996 156.9 1997 160.5 1998 163.0 1999 166.6 2000 172.2 2001 177.1 2002 179.9 2003 184.0 2004 188.9 2005 195.3 2006 201.6 2007 207.342 2008 215.303 2009 214.537 2010 218.056 18) 5% Weekly Earnings for the period 1979-2010 Year Annual 1C) 14.0% 12.0% —CP| Growth Rate 10.0% —Weekly Earning Growth Rate 8.0% 6.0% Percent Change 4.0% - There are 13 instances between 1979 and 2010 where the rate of growth for either one of the variables goes in the opposite direction as the other (growth for one slows while for the other it expands or visa versa). This means that though they generally follow a similar trend, they are not explicitly linked to one another. 2) GDP Growth (Chained 2005 = 100) Year Forecast survez date Forecast Actual 2008 2007 Q1 (pp. 4) 3.0% 0.0 2009 2008 Q1 (pp. 5) 2.8% —2.6 2010 2009 Q1 (pp. 6) 2.2% 2.9 / / 3). Vebcfly Year 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1200 Velocity for the period 1960—2010 NGDP M1 V Year NGDP M1 526.4 140.3 1986 4460.1 666.3 544.8 143.1 1987 4736.4 743.6 585.7 146.5 1988 5100.4 774.8 6178 1510 1989 54821 7822 663.6 156.8 1990 5800.5 810.6 7191 1634 1991 59921 8590 787.7 171.0 1992 6342.3 965.9 832.4 177.7 1993 6667.4 1078.4 909.8 190.1 1994 7085.2 1145.2 9844 2014 1995 7414] 11430 1038.3 209.1 1996 7838.5 1106.8 1126.8 223.1 1997 8332.4 1070.2 1237.9 239.0 1998 8793.5 1080.7 13823 2563 1999 93535 11023 1499.5 269.1 2000 9951.5 1103.7 1637.7 281.3 2001 10286.2 1140.3 1824.6 297.2 2002 10642.3 1196.3 203OJ. 3199 2003 111421 12735 2293.8 346.2 2004 11867.8 1344.2 2562.2 372.6 2005 12638.4 1371.6 2788J. 3957. 2006 133989 13742 3126.8 425.0 2007 14061.8 1372.2 3253.2 453.0 2008 14369.1 1433.1 3534.6 503.2 2009 14119 1636.8 3930.9 538.6 . 2010 14660.4 1743.6 4217.5 587.0 Velocity for the period 1960—2010 1000 800 600 400 200 --VemcL" 000 1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 lil’fl‘iililii’r—i1llllilllilil'IilTirlilll illiiilll 2010 Year Correlation coefficient " 9:979Q9637 This is an extremely strong correlation coefficient between NGDP and M1. 5' ce the Quantitative Theory of Money states that money supply has a direct, proportional relationship with the price level, a strong correlation coefficient between the two suggests that their is ligitamacy behind this theory, at least in the long run. 1929—20 1 0 Share of GDP Standard In percent Deviation GDP (Avg. in Billions) $ 5,260.20 $ 3,829.82 Variable Consumption 66.45% 6.62% I Investment 1 1 .43% 3.50% Government spending 26.75% 1 1.18% [C(t) — C(t-1)] = 0526229351 + 26.1670912290181*[ Y(t)- Y(t-1) ] Slope ([3) 0526229351 This is the MPC for every additional dollar earned, people in the US will spend approximately $0.53 Intercept (01) 2616709123 This is the autonomous consumption, it _ is the basic level of consumption not reliant on income earned r"; 7) Year 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 RGDP 977 892.8 834.9 725.8 716.4 794.4 865 977.9 1028 992.6 1072.8 1166.9 1366.1 1618.2 1883.1 2035.2 2012.4 1792.2 1776.1 1854.2 1844.7 2006 2161.1 2243.9 2347.2 2332.4 2500.3 2549.7 2601.1 2577.6 2762.5 2830.9 2896.9 3072.4 3206.7 3392.3 3610.1 3845.3 3942.5 4133.4 NGDP 103.6 91.2 76.5 58.7 56.4 66 73.3 83.8 91.9 86.1 92.2 101.4 126.7 161.9 198.6 219.8 223 222.2 244.1 269.1 267.2 293.7 339.3 358.3 379.3 380.4 414.7 437.4 461.1 467.2 506.6 526.4 544.8 585.7 617.8 663.6 719.1 787.7 832.4 909.8 GDP Deflator Deflator 2010 = 1 RGDP (in 2010 Dollars) 0.106038895 0.102150538 0.09162774 0.080876274 0.078726968 0.083081571 0.084739884 0.085693834 0.089396887 0.08674189 0.085943326 0.086896906 0.092745773 0.100049438 0.105464394 0.107999214 0.11081296 0.123981698 0.137435955 0.145129975 0.144847401 0.146410768 0.157003378 0.159677347 0.161596796 0.163093809 0.165860097 0.171549594 0.177271155 0.18125388 0.183384615 0.185947932 0.188063102 0.19063273 0.19265912 0.195619491 0.199191158 0.204847476 0.211135067 0.220109353 0.095824431 0.092310629 0.082801467 0.073085663 0.071143394 0.075078529 0.076577101 0.077439159 0.080785507 0.078386259 0.077664618 0.078526343 0.083811802 0.090411923 0.09530527 0.097595917 0.100138622 0.112038849 0.12419709 0.131149964 0.13089461 0.132307381 0.141879632 0.144296024 0.146030577 0.147383387 0.149883205 0.155024647 0.160195064 0.163794143 0.16571963 0.168036028 0.169947449 0.172269552 0.174100744 0.17677595 0.180003568 0.185115026 0.190796949 0.198906765 1081.143914 987.9685633 923.8966773 803.1670959 792.7650971 879.079555 957.2052052 1082.13985 1137.58029 1098.406805 1187.155774 1291.286421 1511.720267 1790.693021 2083.830199 2252.143392 2226.913012 1983.240658 1965.424468 2051.849586 2041.336927 2219.8308 2391.463779 2483.089896 2597.401223 2581.023608 2766.821011 2821.486834 2878.365849 2852.360852 3056.970381 3132.661521 3205.696831 3399.904361 3548.520152 3753.904298 3994.920822 4255.192111 4362.753204 4574.002307 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 4261.8 4269.9 4413.3 4647.7 4917 4889.9 4879.5 5141.3 5377.7 5677.6 5855 5839 5987.2 5870.9 6136.2 6577.1 6849.3 7086.5 7313.3 7613.9 7885.9 8033.9 8015.1 8287.1 8523.4 8870.7 9093.7 9433.9 9854.3 10283.5 10779.8 11226 11347.2 11553 11840.7 12263.8 12638.4 12976.2 13228.9 13228.8 12880.6 984.4 1038.3 1126.8 1237.9 1382.3 1499.5 1637.7 1824.6 2030.1 2293.8 2562.2 2788.1 3126.8 3253.2 3534.6 3930.9 4217.5 4460.1 4736.4 5100.4 5482.1 5800.5 5992.1 6342.3 6667.4 7085.2 7414.7 7838.5 8332.4 8793.5 9353.5 9951.5 10286.2 10642.3 11142.1 11867.8 12638.4 13398.9 14061.8 14369.1 14119 0.230982214 0.243167287 0.255319149 0.266346795 0.281126703 0.306652488 0.33562865 0.354890786 0.377503394 0.404008736 0.437608881 0.477496147 0.522247461 0.554122877 0.57602425 0.597664624 0.615756355 0.629379807 0.647641967 0.669880088 0.695177469 0.722003012 0.747601402 0.765322006 0.782246521 0.79871938 0.815366682 0.830886484 0.845559806 0.855107697 0.867687712 0.886468911 0.906496757 0.92117199 0.94100011 0.967709845 1 1.032575022 1.062960639 1.086198295 1.09614459 0.20873227 0.219743585 0.230724888 0.240690268 0.254046465 0.277113414 0.303298374 0.320705036 0.341139427 0.365091576 0.395455102 0.431500126 0.471940658 0.500745594 0.520537261 0.540093072 0.556442071 0.56875321 0.585256222 0.605352199 0.628212746 0.652454251 0.675586812 0.691600434 0.706894653 0.721780721 0.736824431 0.750849248 0.764109126 0.772737292 0.784105505 0.801077558 0.819176171 0.832437775 0.850355901 0.874492754 0.903672478 0.933109629 0.960568275 0.981567505 0.990555698 4716.089183 4725.052608 4883.738419 5143.12443 5441.130629 5411.141888 5399.633294 5689.340025 5950.939228 6282.807252 6479.117314 6461.411784 6625.409254 6496.712184 6790.292 7278.190006 7579.405332 7841.889811 8092.865696 8425.508338 8726.502344 8890.278495 8869.474498 9170.468504 9431.957048 9816.277704 10063.04853 10439.51235 10904.72515 11379.67599 11928.87939 12422.64235 12556.76174 12784.49912 13102.86667 13571.06728 13985.598 14359.40599 14639.0427 14638.93205 14253.61545 14660.4 14660.4 1106595613 2010 13248.2 RGDP (in 2010 Dollars) —RGDP (in 2010 Dollars) 16000 14000 12000 10000 8000 6000 “5:8 3 22:5 4000 2000 OHON Boom ¢OON Hoom mmma mmmH NmmH mwmfi mwma mmmfi ome whma whoa Han mama mama mama mmmH mmmfi mmmH ommH hvma vvma adma mmma mmmH NmmH mNmH Year ...
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