In order to complete this assignment, you will need to read Chapter 7 of the 2015 Economic Reportof the President(ERP) by the Council of Economic Advisers.
1. CHART1: Replicate Figure 7-1. Figure 7-1 illustrates the growth in world trade and world output since1960.
a. Download data. Download annual data on world exports of goods and services and GDP in current US$ from the World Bank'sWorld Development Indicatorsfor the period 1960 to the present (data are now available through 2016). Download annual data on the U.S. GDP price deflator from theFederal Reserve Bank of St. Louisfor the same time period (use the "average" aggregation method). Combine all three data series into a single Excel spreadsheet, in which you have 4 columns: Year, Exports, GDP, and Deflator (columns A-D). Exports and GDP should be formatted in dollars with 1,000 commas and no decimal places. The deflator should be formatted as a number with 1 decimal place. Label this worksheet"Data".
b. Manipulate data I. Using the price deflator, generate 2 new columns of data (columns E and F): Real Exports and Real GDP, in which all values are denoted in 2009 dollars. Once again, format the data in dollars with 1,000 commas and no decimal places. For more information on how to deflatean economicseries, please see this short summary from the Federal Reserve Bank of Dallas. What is the economic reasoning for using real exports and real GDP?
a. Manipulate data II. Using the real values for exports and GDP, index the series so that 1960 is equal to 100 in the next two columns (G and H). Format the series as a number, with 1,000 commas and no decimal places. What is the economic reasoning for indexing the series in this manner?
b. Chart data. In a new worksheet, labeled "Chart 1", chart the indexed real exports and indexed real GDP series and format as is done in Figure 7-1 of the ERP. I strongly suggest you check your work by comparing your chart to Figure 7-1, as published. The formatting does not have to be perfect, but you should at a minimum create a figure title, provide figure notes, and label the series and axesaccordingly.
c. Calculate statistics I. In columns I and J, calculate annual growth rates of real exports and real GDP from 1961-2015. Format the data as a percentage, with 1 decimal place. In cells I59-I63, calculate basic summary statistics (minimum, maximum, average, median, and standard deviation) for the annual real export growth series and format them in percentage terms to one decimal place. In cells J59-J63, calculate the same basic summary statistics for the annual real growth rates. In which year between 1961 and 2016 did the world economy grow the fastest? In which year between 1961 and 2016 did the world economy grow the slowest? What was the average annual growth rate of world exports between 1961 and 2016?
d. Calculate statistics II. In cells I65-J70, calculate average annual growth rates of world exports and world GDP (respectively in columns I and J) for each of the 6 decades: 1961-1969, 1970-1979, 1980-1989, 1990-1999, 2000-2009, 2010-2016. Format the data in percentage, with one decimalplace.
e. Report data.The Chairman of the Council of Economic Advisers asks you to summarize and interpret the statistics from part f in two bullet points. The first bullet should describe the evolution over time of average annual growth rates for world exports and world GDP. The second bullet should describe the relationship between export growth rates and GDP growth rates in various decades. Where possible, you should rely on your own knowledge of the world economy over time to go deeper and interpret the data rather than just report thedata.
2. CHARTS 2 and 3: Chart World Exports and Imports as a Percentage of GDP. Page 294 of the ERPstates "Worldwide flows of goods and services as a share of the global economy are at an all-timehigh".
a. Manipulate data. Using the World Bank data on nominal exports of goods and services and nominal GDP for the world (already downloaded in stage 1), generate a new column: the Exports/GDP ratio (column L-leave column K blank). Format data as a percentage, with 1 decimal place. In 2013 (the year referenced in the ERP), world exports amount to what share of world GDP? Is this "an all-timehigh"?
b. Chart data I. In a new worksheet, labeled "Chart 2", chart world exports as a percentage of GDP. Format this chart accordingly, with an appropriate title, notes, andlabels.
c. Chart data II. In a new worksheet, labeled "Chart 3", plot world imports as a percentage of GDP on the same graph as world exports as a percentage of GDP. Again, format this chart accordingly. Provide a detailed explanation of the steps you took to arrive at the new chart. In 2013, world imports amount to what share of world GDP? Hypothesize an explanation for the difference between your answers in part a and partc.
3. CHART 4: Chart U.S. Exports and Imports as a Percentage of GDP. The Treasury Secretary has seen your work from the first two stages and is interested in knowing what these series look like for the UnitedStates.
a. Download and manipulate data. Download and organize the necessary data in the next columns of your data worksheet. Provide a detailed explanation of the steps you took to arrive at the newdata.
b. Chart data. In a new worksheet, labeled "Chart 4", plot U.S. imports as a percentage of GDP on the same graph as U.S. exports as a percentage of GDP, as requested by the Secretary of the Treasury. Again, format this chartaccordingly.
c. Report data.Alongside your chart, the Treasury Secretary would like you to summarize the data in two bullets. The first bullet should report on changes over time in U.S. imports and U.S. exports as a share of GDP. The second bullet should discuss the relationship between the two series [as a hint, you may want to hypothesize an explanation for any differences betweenthe twoseries].
This is a homework assignment on international economics using datasets.
Attachment:- Assignment File.rar