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Project 2: Study of the relationships among
Macroeconomic Variables |
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in the United States. |
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Objective: To have students produce a graphic
visualization of |
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macroeconomic variables for
the period 1959-98. |
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Procedures: |
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1. The data for the project are available at
the bottom of this page. The |
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Col. a - Year |
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Col. b - Real GDP (RGDP) |
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Col. c - GDP Deflator
(PGDP) |
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Col. d - Unemployment Rate
(UR) |
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2. You will next need to perform the
following three transformations: |
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Cols. e and f- calculate the
percent change of RGDP and PGDP; the first |
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is real output growth in the US, the second is the inflation |
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rate. To do the
growth in GDP, for example, use the formula |
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= ln(b5/b4)*100 in cell e5, and copy this down. |
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Col. g - take the average
of the previous five YDOT's. This is
a |
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proxy for the unobservable potential growth rate of real GDP. |
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I will assume you can figure out how to do this. |
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3. Now comes the time to create a graph of
the five series in columns |
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D through g. You need
to include a title and legends so the reader |
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can figure out what you've got on the graph. |
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4. Next, print out the spreadsheet data and
the graph. Do these separately |
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so you've got plenty of room for the graph. |
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5. Finally, explain, in your own words, what
the picture is telling you. |
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In the immortal words of that great artist Rod Stewart
"Every Picture |
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Tells a Story, Don't It?" OR "a picture's worth a thousand words." |
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