Economic Growth Experience Essay Example | Topics and Well Written Essays - 2250 words

Economic Growth Experience - Essay Example Therefore, real GDP is preferable as it gives a more accurate view of the economy. Per capita GDP is the most preferred measure because it shows and compares relative performances of each given country. There are problems that may arise when comparing the growth rate of different countries; this may be due to components that are used in one country in calculating their GDP may be omitted in the other country. In additional to that the economies of the two countries may not be equal or homogeneously comparable. However in any country whereby there is a constant increase in per –capita GDP may signify improvement in welfare and living standards. Other statistics that can be used in analyzing economic growth of a country include income distribution analysis, household consumption and wealth analysis. These statistics are not widely used in all countries compared to GDP, but they work efficiently giving the same results. Year GDP GROWTH Growth rate (%) Mean rate Deviation from mea n(?) 1990 544.7 1991 533.8 -10.9 -2 1.78 -3.78 14.2884 1992 531.1 -2.7 -0.5 1.78 -2.28 5.1984 1993 542 10.9 2 1.78 0.22 0.0484 1994 565.4 23.4 4.3 1.78 2.52 6.3504 1995 581.2 15.8 2.7 1.78 0.92 0.8464 1996 593.7 12.5 2.2 1.78 0.42 0.1764 1997 614.4 20.3 3.4 1.78 1.62 2.6244 1998 628.6 14.2 2.3 1.78 0.52 0.2704 1999 635.7 7.1 1.1 1.78 -0.68 0.4624 2000 650.4 14.7 2.3 1.78 0.52 0.2704 ?=17.8 ?=30.536 a) The growth rate is given in column 4 above and the overall growth rate is; {(650.4-544.7) ?544.7} ?100 =19.4% b) The average growth rate shall be; (-2+-0.5+2+4.3+2.7+2.2+3.4+2.3+1.1+2.3)?10 =1.78 c) The standard deviation shall be; vn; where n is the number of years. Therefore; v30.536/10 = v3.0536 = 1.75 The GDP growth rate has been relatively stable over the years. Q.3 (a) Alpha Beta Gamma Growth Rate 0.05% 2% 6% 2001 $1,000.00 $1,000.00 $1,000.00 2002 $1,005.00 $1,020.00 $1,060.00 2003 $1,010.03 $1,040.40 $1,123.60 2004 $1,015.08 $1,061.21 $1,191.02 2005 $1,020.15 $1,082.43 $1,264. 48 2006 $1,025.25 $1,104.08 $1,338.23 2007 $1,030.38 $1,126.16 $1,418.52 2008 $1,035.53 $1,148.69 $1,503.63 2009 $1,040.71 $1,171.65 $1,593.85 2010 $1,045.91 $1,195.08 $1,689.48 2011 $1,051.14 $1,218.98 $1,790.85 2012 $1,056.40 $1,243.36 $1,898.30 2013 $1,061.68 $1,268.23 $2,012.20 2014 $1,067.00 $1,298.60 $2,132.93 2015 $1,072.32 $1,319.47 $2,260.90 2016 $1,077.68 $1,345.86 $2,396.56 2017 $1,083.07 $1,372.77 $2,540.35 2018 $1,088.49 $1,400.24 $2,692.77 2019 $1,093.93 $1,428.24 $2,854.34 2020 $1,099.40 $1,456.81 $3,025.60 2021 $1,104.90 $1,485.94 $3,207.14 2022 $1,110.42 $1,515.66 $3,399.56 2023 $1,115.97 $1,545.97 $3,603.54 2024 $1,121.55 $1,576.89 $3,819.75 2025 $1,127.16 $1,608.43 $4,048.94 2026 $1,132.80 $1,640.59 $4,291.87 2027 $1,138.46 $1,673.41 $4,549.38 2028 $1,144.15 $1,706.87 $4,822.34 2029 $1,149.87 $1,741.01 $5,111.68 2030 $1,155.62 $1,775.84 $5,418.38 2031 $1,161.40 $1,811.35 $5,743.49 With a growth rate of 0.5% the GDP of alpha is expected to rise to $1161, beta $1811 , and gamma $5743 by 2031. Q. 3bSmall differences in growth rate could have a big impact on countries’ economy Q.3c.The per capita GDP at a future year, (tn) shall be given by; Vtn = Vt0*(1+CAGR) n 1. Where; CAGR is the compound annual growth rate 2. Vtn is the GDP at time n 3. Vt0 is the initial GDP at the beginning Q.4 a. 1960 2000 Minimum GDP per capita $456.2411 $515.0736 Maximum GDP per capit