[Excel Problem] In this problem we investigate the relationship between the size of government and...

Question

[Excel Problem] In this problem we investigate the relationship between

the size of government and growth in GDP per person between XXXXXXXXXX

for the following countries: Australia, Canada, Germany, Japan, Spain, and

the United States.

(a) Go to this Saint Louis FRED page, and download the “Share of Government Consumption at Current Purchasing Power Parities” for the

relevant subset of countries. Plot the trends of government’s share over

time for the countries. Comment on the trends. Do they seem to be

moving in the same direction for all the countries?

(b) Next, we have to construct real GDP per capita. First, go to this, page,

and download ”‘Expenditure-Side Real GDP at Chained Purchasing

Power Parities” for the subset of countries. Next go to this page, and

download “Population” for each country. Real GDP per capita is Real

GDP divided by population. Calculate real GDP per person at each

point in time for each country. Plot the log level of real GDP per capita

over time for each country. Do the countries appear to be getting closer

together or fanning out?

(c) For every country, calculate the average share of government expenditures

and the average rate of growth in output per worker over ten years.

For example, calculate the average share of government expenditures in

Canada from XXXXXXXXXXand the average growth rate in GDP per capita

between XXXXXXXXXXYou will have five decade pairs for each country.

Once these are constructed, create a scatter plot of real GDP growth on

the vertical axis and government’s share of expenditure on the horizontal

axis. What is the correlation between these variables?

Prince · Accepted Answer

Question a
	
	Year	Canada	Japan	Austrailia	Germany	Spain	US
	1960	0.10954418033361400	0.21403414011001600	0.08910943567752840	0.12509457767009700	0.11054722219705600	0.12422939389944100
	1961	0.12105742096900900	0.20703747868537900	0.09208832681179050	0.13128305971622500	0.10638731718063400	0.12758435308933300
	1962	0.11804455518722500	0.20196758210659000	0.09079550206661220	0.13772785663604700	0.10253899544477500	0.12849257886409800
	1963	0.11648428440094000	0.20230428874492600	0.08786673098802570	0.14415863156318700	0.10376766324043300	0.12671762704849200
	1964	0.11591477692127200	0.18870562314987200	0.09225287288427350	0.13760553300380700	0.10106337815523100	0.12331434339284900
	1965	0.11663128435611700	0.18622335791587800	0.10237161070108400	0.14018794894218400	0.10138134658336600	0.12256257981061900
	1966	0.12121150642633400	0.17997376620769500	0.10287068784236900	0.14353781938552900	0.09750037640333180	0.12762755155563400
	1967	0.12961281836032900	0.17023739218711900	0.10869179666042300	0.15123490989208200	0.09604357182979580	0.13709871470928200
	1968	0.13285346329212200	0.16043065488338500	0.10576491802930800	0.14600864052772500	0.09280521422624590	0.13955608010292100
	1969	0.13406665623188000	0.15089803934097300	0.10751744359731700	0.14337737858295400	0.09060821682214740	0.14022849500179300
	1970	0.14275795221328700	0.14385434985160800	0.10939887911081300	0.14316698908805800	0.09235962480306630	0.14026407897472400
	1971	0.14174796640873000	0.14847852289676700	0.11091602593660400	0.14898458123207100	0.09306325018405910	0.13751664757728600
	1972	0.14070548117160800	0.14538978040218400	0.11254239827394500	0.15114499628543900	0.09189458191394810	0.13296575844287900
	1973	0.13714271783828700	0.14322084188461300	0.11047288775444000	0.15302419662475600	0.09159359335899350	0.12479501217603700
	1974	0.14230589568615000	0.14544041454792000	0.12471938878297800	0.16103674471378300	0.09679047763347630	0.12883751094341300
	1975	0.15048189461231200	0.15706954896450000	0.13326685130596200	0.16903720796108200	0.10174162685871100	0.13344655930995900
	1976	0.14396587014198300	0.15656191110611000	0.12827973067760500	0.16641032695770300	0.10727826505899400	0.12625275552272800
	1977	0.14572088420391100	0.15634797513485000	0.13056749105453500	0.16746006906032600	0.11068943142890900	0.12307292222976700
	1978	0.14036524295806900	0.15507964789867400	0.12793494760990100	0.17067299783229800	0.11633168160915400	0.11776102334260900
	1979	0.13390624523162800	0.15317997336387600	0.12479897588491400	0.17152406275272400	0.12291146069765100	0.11355505138635600
	1980	0.13631118834018700	0.15358260273933400	0.12656615674495700	0.18104580044746400	0.12831167876720400	0.11630856990814200
	1981	0.14377696812152900	0.15476296842098200	0.12502090632915500	0.18966750800609600	0.13929408788681000	0.11706400662660600	Comment: Yes, government’s share is moving in the same direction for all the countries
	1982	0.15693561732769000	0.15345990657806400	0.13095815479755400	0.18415310978889500	0.14653812348842600	0.12226053327322000
	1983	0.16006807982921600	0.15339347720146200	0.12793391942977900	0.17514961957931500	0.14934664964675900	0.11932910233736000
	1984	0.16116891801357300	0.14867845177650500	0.13109427690506000	0.16893102228641500	0.15028853714466100	0.11200639605522200
	1985	0.17208075523376500	0.13997673988342300	0.13264407217502600	0.16479811072349500	0.15578758716583300	0.11352997273206700
	1986	0.17730200290679900	0.13907285034656500	0.13862004876136800	0.16009713709354400	0.15356543660163900	0.11619435250759100
	1987	0.17066323757171600	0.13960742950439500	0.13656409084796900	0.15807215869426700	0.15594239532947500	0.11514431238174400
	1988	0.16890497505664800	0.13485342264175400	0.13570196926593800	0.15423043072223700	0.14983455836772900	0.11296234279871000
	1989	0.16875143349170700	0.13333509862422900	0.13884745538234700	0.14721526205539700	0.15228013694286300	0.11335313320159900
	1990	0.16593642532825500	0.12517124414444000	0.13896143436431900	0.13476821780204800	0.14442685246467600	0.10822805017232900
	1991	0.17695225775241900	0.12482225894928000	0.14735014736652400	0.13209931552410100	0.14370374381542200	0.11029160767793700
	1992	0.17514950037002600	0.12768632173538200	0.14596883952617600	0.13874651491642000	0.14620596170425400	0.10797891020774800
	1993	0.17281736433506000	0.12978874146938300	0.14607900381088300	0.13900613784790000	0.14577519893646200	0.10395846515893900
	1994	0.16506949067115800	0.13515040278434800	0.14908728003501900	0.14038614928722400	0.14007475972175600	0.10088241100311300
	1995	0.15614093840122200	0.13598373532295200	0.15046489238739000	0.13971191644668600	0.13429163396358500	0.09742300212383270
	1996	0.14679133892059300	0.13240496814250900	0.14565126597881300	0.13800105452537500	0.13057385385036500	0.09148012846708300
	1997	0.14851181209087400	0.13736510276794400	0.14876602590084100	0.13985964655876200	0.13438594341278100	0.09302555024623870
	1998	0.15427401661872900	0.14224538207054100	0.15169936418533300	0.14008317887783100	0.13757002353668200	0.09300914406776430
	1999	0.15350155532360100	0.14877380430698400	0.15001778304576900	0.14367802441120100	0.13729748129844700	0.09341235458850860
	2000	0.14816859364509600	0.15121790766716000	0.14894472062587700	0.14435507357120500	0.14239268004894300	0.09314769506454470
	2001	0.15363772213459000	0.15957850217819200	0.14964979887008700	0.14752538502216300	0.14837458729744000	0.09757170081138610
	2002	0.15355522930622100	0.16429832577705400	0.14888559281826000	0.15250380337238300	0.15237079560756700	0.10094951093196900
	2003	0.15526747703552200	0.16858945786953000	0.15178753435611700	0.15243040025234200	0.14935688674449900	0.10402534902095800
	2004	0.15282280743122100	0.16831098496913900	0.15178972482681300	0.14618597924709300	0.15458631515502900	0.10473350435495400
	2005	0.14915934205055200	0.16899000108242000	0.14968806505203200	0.14272858202457400	0.15355859696865100	0.10657677054405200
	2006	0.15421119332313500	0.16799193620681800	0.14964284002780900	0.14445623755455000	0.15627646446228000	0.10602919757366200
	2007	0.15919962525367700	0.

[Excel Problem] In this problem we investigate the relationship between the size of government and growth in GDP per person between 1960-2010 for the following countries: Australia, Canada, Germany,...

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