The purpose of the data exercises is to ensure that you are familiar with the methodology of collecting data from the web and analyzing it. These exercises include collecting the required data, creating a graph or table to present this information, and two to three double-spaced pages of analysis of the data - GDP growth: recessions and cycles.
GDP Growth: Recessions and Cycles
Figure 1 - US Real GDP 1930 – 2014 with 2009 as the Base Year Source: (Shiller, 2015); (Federal Reserve Bank of St. Louis, 2015)
Figure 1 above shows the real Gross Domestic product (GDP) of the United States for the years 1930 to 2014. Real GDP is essential and important as it shows the general soundness of the economy. Thus, when real GDP is high it means other macroeconomic factors such as employment and economic growth are positive and vice versa. This is because real GDP is substantially correlated to these macroeconomic factors. Therefore, the chart above shows that America’s GDP has been growing steadily over the years. This consistent growth has seen to it that America’s real GDP hit a high of 16.16 trillion U.S. dollars up from a low of around 1.06 trillion U.S. dollars in 1930. It is also apparent that the steady growth in the real GDP has led to many significant improvements in the economy and standards of living. Thus, it is evident that the standards of living and other macroeconomic factors are better now than in the mid nineteen hundreds (OpenStax College, 2014).
Further, statistical and economic analysis shows that the real GDP of America has an average median and mean of approximately 6.34 and 7.20 trillion dollars respectively (Shiller, 2015). This is caused by the various cyclical changes in the economy. Despite the steady growth in real GDP the U.S. economy has experienced several recessions, depressions and expansions. These have led to several business cycles as depicted by the peaks and troughs in table 1 below. Thus, it is evident that the economy has experienced recessions in 1980, 1982, 1991, 2001 and 2007. Since the year 1980 the economy has experienced five economic cycles as inferred from table 1 below. However, the great depression of 2007 to 2009 was the biggest since the thirties great depression (Shiller, 2015).
Table 1 - Business Cycles since the 1980
Turning Point Date Peak or Trough Announcement Date with Link
Jun-09 Trough 20-Sep-10
Dec-07 Peak 1-Dec-08
Nov-01 Trough 17-Jul-03
Mar-01 Peak 26-Nov-01
Mar-91 Trough 22-Dec-92
Jul-90 Peak 25-Apr-91
Nov-82 Trough 8-Jul-83
Jul-81 Peak 6-Jan-82
Jul-80 Trough 8-Jul-81
Jan-80 Peak 3-Jun-80
Source: (National Bureau of Economic Research, 2015)
Another way to analyze the GDP is through the use of the annual growth rate of the same. Figure 2 below indicates the growth rates of the American GDP from the nineteen thirties to the year 2014. From looking at the graph it is easy to identify the periods of recessions and expansions as indicated by the growth rates trend. For example, in the year 1943 the real GDP growth rate was at its highest and stood at approximately 78%. Since then the growth rate has hit other highs in the early fifties, mid –sixties, mid-seventies, early eighties and mid-nineties amongst others (Shiller, 2015).
All these highs are accompanied by their relevant lows or troughs and hence show the various business cycles in the American Economy. For example, during the recent great depression of 2007 the GDP growth rate was negative at over –4.4%. As at the third quarter in 2014 the real GDP growth rate stood at 2.43%. Most notable however, is how the real GDP growth rate has transformed since the mid-thirties. However, the great growth rates experienced just after the great recession of the early thirties and during world war two have never been matched.
Figure 2 - Real U.S. GDP Growth Rateswith 2009 as the Base Year Source (Shiller, 2015); (Federal Reserve Bank of St. Louis, 2015)
Part 2: Income Approach to Calculating GDP Source: (Bureaua of Economic Analysis, 2015)
GDP is a measure of what is produced within a country’s borders only by both citizens and immigrants. However, Gross National Product (GNP) is a measure of what is produced by a country’s firms and citizens within and without its borders. Therefore, to arrive at the GNP we add what we receive from our citizens abroad and subtract what immigrants pay abroad to their citizenry nations (OpenStax College, 2014). As at the beginning of the first quarter in 2012 the GNP was 16,195 billion dollars while the GDP was $15,956.5 billion. In the third quarter of 2014 the GNP was $17,829.6 billion while the GDP was $17,599.8 billion. It is therefore clear that difference between the GNP and GDP has remained below 1.5%.
National Income (NI) is the value of what domestic businesses and individuals earn. Thus, it is the total of income that is domestically applicable to individuals and businesses (OpenStax College, 2014). In Q1 and Q3 of 2014 the GNP was $17,255 billion and $17,829.6 billion respectively while the NI was $14,733.7 billion and $15,222.9 billion respectively. Thus, the difference was approximately 17%. Additionally, to determine NI from the GNP one has to deduct depreciation from the private and the government sector to find the net national product. Subsequently, one has to deduct statistical discrepancies from the net national product to get the NI. The corporate profits with inventory valuation and capital consumption adjustments makes the most of the NI figure.
Part 3: GDP in Different Countries
Country Name GDP (current US$) [NY.GDP.MKTP.CD] - 2013 [YR2013] Population, total [SP.POP.TOTL] - 2013 [YR2013] Current US$
1 2 3 4 = 2/3
Angola $124,178,241,815.74 21,471,618 5,783.367
Australia $1,560,372,473,125.21 23,130,900 67,458.36
Brazil $2,245,673,032,353.76 200,361,925 11,208.08
China $9,240,270,452,046.99 1,357,380,000 6,807.431
Germany $3,730,260,571,356.51 80,621,788 46,268.64
India $1,876,797,199,132.60 1,252,139,596 1,498.872
United Kingdom $2,678,454,886,796.67 64,097,085 41,787.47
United States $16,768,100,000,000.00 316,128,839 53,041.98
Data from database: World Development Indicators
Last Updated: 12/19/2014
Source: (The World Bank Group, 2015)
The above data from the World Developmental Indicators table shows that the GDP per capital for the eight countries is as follows in descending order:
1) Australia $67,458.36
2) United States $53,041.98
3) Germany $46,268.64
4) United Kingdom $41,787.47
5) Brazil $11,208.08
6) China $6,807.43
7) Angola $5,783.37
8) India $1,498.87
The order does not remain the same for total GDP as well as for per capita GDP for the countries listed above. This is because the GDP values for the different countries are different. For example, the GDP for USA is higher than the GDP for Australia while that for China is higher for all other countries except the USA’s. Secondly, the population totals for the countries are also different. For example, the population for China is higher than all the other countries while that for Australia is lower than all the other countries except Angola.
Thus, these two statistics affect the GDP per capital of any country as they are the numerators and denominators of the GDP per capital equation. GDP per capital is computed by diving the GDP of any country by the total population of that country = GDP/Total population. Subsequently, you find that the GDP per capital of India is the lowest while its population is the largest. Conversely, you find the GDP for Australia is the best while its population is only second last of the eight countries in comparison.
Part 4: Index of Economic Freedom
Country Name Region World Rank 2014 Score Property Rights Business Freedom Trade Freedom Financial Freedom
Angola Sub-Saharan Africa 160 47.7 15 47.5 70.1 40
Australia Asia-Pacific 3 82.0 90 94.6 86.4 90
Brazil South and Central America / Caribbean 114 56.9 50 53.8 69.3 60
China Asia-Pacific 137 52.5 20 49.7 71.8 30
Germany Europe 18 73.4 90 89.9 87.8 70
India Asia-Pacific 120 55.7 50 37.7 65.6 40
United Kingdom Europe 14 74.9 90 92.0 87.8 80
United States North America 12 75.5 80 89.2 86.8 70

Source: (The Heritage Foundation, 2015)
The rank in economic freedom (overall) and the other four parameters of the eight countries as indicated above is as follows:
Country Name 2014 Rank Property Rights Business Freedom Trade Freedom Financial Freedom RANK RANK RANK RANK RANK
Angola 8 7 7 6 6
Australia 1 1 1 4 1
Brazil 5 5 5 7 5
China 7 6 6 5 8
Germany 4 1 3 1 3
India 6 5 8 8 6
United Kingdom 3 1 2 1 2
United States 2 4 4 3 3
Source: (The Heritage Foundation, 2015)
The above rankings of the eight countries show no major discrepancies in the overall ranking as well as in other categories ranking. For example, Australia is constantly at the top position for all categories except for the trade freedom category. Secondly, Angola is constantly at the near bottom in all categories while Brazil is near a constant five which is the same for the GDP per capital. As such it is clear that the economic freedoms measured above as well as others playing a key role in promoting economies of the world. Thus, more free economic freedoms foster GDP growth, GDP per capital, GNP and NI amongst others. However, countries in Europe, Asia-pacific and North America seem to outdo others in terms of economic growth and economic freedoms. Conversely, countries in sub-Saharan Africa, south and central Africa seem to perform the worst. References
Bureaua of Economic Analysis. (2015). National Income and Product Accounts Tables. bea.gov [Online]. Retrieved January 22, 2015, from:
Federal Reserve Bank of St. Louis. (2015). Real Gross Domestic Product. stlouisfed.org [Online]. Retrieved January 13, 2015, from:
National Bureau of Economic Research. (2015). US Business Cycle Expansions and Contractions. nber.org [Online]. Retrieved January 13, 2015, from:
OpenStax College. (2014). Principles of Macroeconomics. Houston: Rice University .
Shiller. (2015). US Real GDP. multpl.com [Online]. Retrieved January 13, 2015, from:
The Heritage Foundation. (2015). Explore the Data. heritage.org [Online]. Retrieved January 22, 2015, from:
The World Bank Group. (2015). World DataBank . worldbank.org [Online]. Retrieved January 22, 2015, from: