ECO 304L Chapter Unit 3: Ch 9-12, 16: Long-term Inflation- Calculation Study

• School: UT-Austin
• Department: Economics
• Course: ECO 304L
• Professor: M O S T A S H A R I, S H A L A H

Document Summary

Long-term inflation: calculation study: example: let us compare gdp growth rates of the bill clinton and george, bush presidencies. The growth rate from 1992 to 2000 was 35. 46% and the growth rate from. Clearly, the economy grew more in the clinton years. But it is somewhat difficult to put these figures into perspective. For example, how do these records compare to typical annual real growth rates that in normal times range between 2. 5 and 3. 5 percent per year. Again we (cid:374)eed to (cid:862)a(cid:374)(cid:374)ualize(cid:863) the gro(cid:449)th rates to (cid:373)ake gro(cid:449)th o(cid:448)er these periods comparable. Bush ga = (,228. 8 / ,226. 0 billion)1/8 1. = (1. 1784)1/8 1 = 0. 0207 or 2. 07: the annualized growth rates of 3. 87% and 2. 07% are directly comparable. The comparison shows that the economy did indeed grow faster during the. Cli(cid:374)to(cid:374) years tha(cid:374) it did duri(cid:374)g bush"s ter(cid:373). Growth in the clinton years was above almost all estimates of long-term normal growth.