Introduction:

In this report we will be examining three economic indicators real GDP growth, the unemployment rate and the inflation rate from the 1929 to 2017.  We will be specifically focusing on the real GDP growth rate and the unemployment rate in the US and how the two variables affect each other.  We will also look at future forecasts and measure the accuracy of these forecasts using different methods and calculating the errors.

Home

Cleaning the data

We put all the cleaned data into percentages.  This is because we believe that it helps to make the data easier to interpret and is a better match since we are talking about rates of change.  The first variable we looked at was the inflation rate this can be described as an increase in the prices of goods, the cost of living and a decrease in the value of money.  As the inflation rate increases prices, interest rates for banks increase too and can result in a higher level of unemployment due to business’s failing.  Another variable in which we looked at is the unemployment rate which is those that are able to work but currently do not, expressed as a percentage.  A consistently high unemployment rate can cause many issues such as an decrease in disposable income, which would lead to a decrease in consumer spending.  The last variable that we looked at was the GDP growth rate (Gross Domestic Product) which is the market value of the entirety of the goods and services produced in a country over a particular time period.  A high GDP would suggest that a country is increasing the amount of production and services that it is supplying and citizens should have a higher income.  The cleaned data can be seen in Figure 1.

Descriptive Statistics

Figure 2: Descriptive Statistics