Economic Power Point
Measurement
Project
Instructions:
This assignment is an extra credit mini project. It ask
s you to download data and reproduce
the graphs shown in class.
It is designed to give you an idea of
what the measurements we talked about
in class look like in reality. You can use whatever software you are
comfortable
with to finish the assignment. (e.g. Excel, STATA, R, Matlab, and etc)
Submission:
You can discuss with yo
ur classmates, but you must finish the project individually and
submit the following to me
): (1) a PDF/word file of plots and answers; (2) a zip file
including all of your raw data, excel file, and codes (if
you have any).
Download the following data from FRED from 1941
– 2017.
1.
Nominal GDP, seasonally adjusted, at quarterly frequency;
2.
Real GDP, seasonally adjusted, at quarterly frequency;
3.
Real domestic investment, seasonally adjusted, at quarterly frequency;
4.
Real consumption expenditure, seasonally adjusted, at quarterly frequency;
5.
Real government expenditure, seasonally adjusted, at quarterly frequency;
6.
Real net export, seasonally adjusted, at quarterly frequency;
7.
CPI for all urban consumers, seasonally adjus
ted, at quarterly frequency;
Use the downloaded data to plot the following graphs and answer the following questions.
1.
Plot the graph of real logGDP and nominal logGDP. What’s difference between these two
measurements of GDP? Which one do you think is a bet
ter measurement of production capacity
of a country? Why?
2.
Reproduce the graph on Slide 16 of
Measurement
. (Remember to take natural log for each
variable.)
3.
Reproduce the graph on Slide 17 of
Measurement
. (Remember to take natural log for each
variable.)
4.
Plot the graph of implicit GDP deflator constructed from
nominal GDP and real GDP
.
5.
Use the implicit GDP deflator in 4 and the CPI downloaded from FRED to construct inflation rate
respectively. Plot these two inflations in one graph. Roughly, which one is hi
gher? Which one
fluctuates more?