Q. Table provided gives data on gross domestic product (GDP) for the United States for the years 1959–2005. a. Plot the GDP data in current and constant (i.e., 2000) dollars against time. b. Letting Y denote GDP and X time (measured chronologically starting with 1 for 1959, 2 for 1960, through 47 for 2005), see if the following model fits the GDP data: Yt = β1 + β2 Xt + ut Estimate this model for both current and constant-dollar GDP. c. How would you interpret β2? d. If there is a difference between β2 estimated for current-dollar GDP and that estimated for constant-dollar GDP, what explains the difference? e. From your results what can you say about the nature of inflation in the United States over the sample period?
Q. Table provided gives data on gross domestic product (GDP) for the United States for the years 1959–2005. a. Plot the GDP data in current and constant (i.e., 2000) dollars against time. b. Letting Y denote GDP and X time (measured chronologically starting with 1 for 1959, 2 for 1960, through 47 for 2005), see if the following model fits the GDP data: Yt = β1 + β2 Xt + ut Estimate this model for both current and constant-dollar GDP. c. How would you interpret β2? d. If there is a difference between β2 estimated for current-dollar GDP and that estimated for constant-dollar GDP, what explains the difference? e. From your results what can you say about the nature of inflation in the United States over the sample period?
Chapter12: Sequences, Series And Binomial Theorem
Section12.3: Geometric Sequences And Series
Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...
Related questions
Question
100%
Q. Table provided gives data on gross domestic product (GDP) for the United States for the years 1959–2005.
a. Plot the GDP data in current and constant (i.e., 2000) dollars against time.
b. Letting Y denote GDP and X time (measured chronologically starting with 1 for 1959, 2 for 1960, through 47 for 2005), see if the following model fits the GDP data:
Yt = β1 + β2 Xt + ut
Estimate this model for both current and constant-dollar GDP.
c. How would you interpret β2?
d. If there is a difference between β2 estimated for current-dollar GDP and that estimated for constant-dollar GDP, what explains the difference?
e. From your results what can you say about the nature of inflation in the United States over the sample period?
![TABLE 3.8
Year
NGDP
RGDP
Year
NGDP
RGDP
Nominal and Real
1959
506.6
Gross Domestic
2,441.3
1983
3,536.7
5,423.8
1960
526.4
Product, 1959-2005
2,501.8
1984
3,933.2
5,813.6
1961
544.7
(billions of dollars,
2,560.0
1985
4,220.3
6,053.7
1962
585.6
except as noted;
2,715.2
1986
4,462.8
6,263.6
1963
617.7
quarterly data at
2,834.0
1987
4,739.5
6,475.1
1964
663.6
seasonally adjusted
2,998.6
1988
5,103.8
6,742.7
1965
719.1
annual rates; RGDP
3,191.1
1989
5,484.4
6,981.4
1966
787.8
in billions of chained
3,399.1
1990
5,803.1
7,112.5
1967
832.6
3,484.6
1991
[2000] dollars)
5,995.9
7,100.5
1968
910.0
3,652.7
1992
6,337.7
7,336.6
1969
984.6
3,765.4
1993
6,657.4
7,532.7
1970
1,038.5
3,771.9
1994
7,072.2
7,835.5
1971
1,127.1
3,898.6
1995
7,397.7
8,031.7
1972
1,238.3
4,105.0
1996
7,816.9
8,328.9
1973
1,382.7
4,341.5
1997
8,304.3
8,703.5
1974
1,500.0
4,319.6
1998
8,747.0
9,066.9
1975
1,638.3
4,311.2
1999
9,268.4
9,470.3
1976
1,825.3
4,540.9
2000
9,817.0
9,817.0
1977
2,030.9
4,750.5
2001
10,128.0
9,890.7
1978
2,294.7
5,015.0
2002
10,469.6
10,048.8
1979
2,563.3
5,173.4
2003
10,960.8
10,301.0
1980
2,789.5
5,161.7
2004
11,712.5
10,703.5
1981
3,128.4
5,291.7
2005
12,455.8
11,048.6
1982
3,255.0
5,189.3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F50fbc884-4de6-47bb-a045-4d2caa13a541%2F51192bb5-47c2-41f5-b286-a0a67831fc5b%2Fqaqpcua_processed.png&w=3840&q=75)
Transcribed Image Text:TABLE 3.8
Year
NGDP
RGDP
Year
NGDP
RGDP
Nominal and Real
1959
506.6
Gross Domestic
2,441.3
1983
3,536.7
5,423.8
1960
526.4
Product, 1959-2005
2,501.8
1984
3,933.2
5,813.6
1961
544.7
(billions of dollars,
2,560.0
1985
4,220.3
6,053.7
1962
585.6
except as noted;
2,715.2
1986
4,462.8
6,263.6
1963
617.7
quarterly data at
2,834.0
1987
4,739.5
6,475.1
1964
663.6
seasonally adjusted
2,998.6
1988
5,103.8
6,742.7
1965
719.1
annual rates; RGDP
3,191.1
1989
5,484.4
6,981.4
1966
787.8
in billions of chained
3,399.1
1990
5,803.1
7,112.5
1967
832.6
3,484.6
1991
[2000] dollars)
5,995.9
7,100.5
1968
910.0
3,652.7
1992
6,337.7
7,336.6
1969
984.6
3,765.4
1993
6,657.4
7,532.7
1970
1,038.5
3,771.9
1994
7,072.2
7,835.5
1971
1,127.1
3,898.6
1995
7,397.7
8,031.7
1972
1,238.3
4,105.0
1996
7,816.9
8,328.9
1973
1,382.7
4,341.5
1997
8,304.3
8,703.5
1974
1,500.0
4,319.6
1998
8,747.0
9,066.9
1975
1,638.3
4,311.2
1999
9,268.4
9,470.3
1976
1,825.3
4,540.9
2000
9,817.0
9,817.0
1977
2,030.9
4,750.5
2001
10,128.0
9,890.7
1978
2,294.7
5,015.0
2002
10,469.6
10,048.8
1979
2,563.3
5,173.4
2003
10,960.8
10,301.0
1980
2,789.5
5,161.7
2004
11,712.5
10,703.5
1981
3,128.4
5,291.7
2005
12,455.8
11,048.6
1982
3,255.0
5,189.3
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Step 1: Write the given information.
VIEWStep 2: Plot the GDP data in current and constant dollars against time.
VIEWStep 3: Estimate the given model for current-dollar GDP.
VIEWStep 4: Estimate the given model for constant-dollar GDP.
VIEWStep 5: Interpret the coefficient β2.
VIEWStep 6: Explain difference between β2 estimated for current-dollar GDP and constant dollar GDP.
VIEWStep 7: Describe the nature of inflation in the United States over the sample period.
VIEWSolution
VIEW
Trending now
This is a popular solution!
Step by step
Solved in 8 steps with 20 images
Recommended textbooks for you