Macroeconomic Analysis

I choose to discuss the change in Gross Domestic Product (GDP) from years 1970-2000. GDP is a very important tool in measuring the economic condition of a country.   When GDP is increasing from year to year, it would be safe to assume income, labor opportunities, and overall business would increase as well.   I decided to discuss the change of GDP opposed to total GDP, for an understanding of the changes in the select macroeconomic variables that significantly affect GDP.   The purpose of this study is to attempt to determine what factors affect the change in GDP, and what arrangements can be made to result in more accurate data.   This can be helpful to any nation’s economy. If accurate results are found to determine what affects the change in GDP, then economic policies can be pursued and implemented to aid in the steady increase of a countries GDP.  

The change in GDP is not subject to any certain variables, for many variables affect the change in GDP.   I chose three variables that I believe will have a considerable impact on the change in GDP: change in consumption, change in investment, and change in unemployment rate.   It is apparent that consumption and investment are directly related in finding the total GDP.   I believe the change in consumption to have a consistent positive relationship with the change in GDP; the more consumers spend the more likely GDP will increase.   I believe change in investment will also provide a positive relation to change in GDP.   A strong investment should provide for greater capital, which will increase productivity.   The third variable, change in unemployment rate, I believe to have a negative relationship to the change in GDP.   I suspect that a decrease in the unemployment rate from year to year will correspond to an increase in the change of GDP.   The data for the three independent variables and dependent variable (GDP) is shown in Appendix A.   This data is time series data from 1970-2000.

Initial Results:
These are the...