What would GDP have been in 2009 if growth didn't slow down in the 1970s?
This material was originally created for
Starting Point: Teaching Economics
and is replicated here as part of the SERC Pedagogic Service.
and is replicated here as part of the SERC Pedagogic Service.
Initial Publication Date: October 14, 2010
Summary
In this Excel spreadsheet data assignment, students use the Fill command to project what the level of GDP would have been in the years 1973-2009 if the long-run GDP growth rate hadn't fallen in the 1970s. Students are asked to make comparisons between actual GDP and these "what if" data. This assignment can be used to motivate a number of discussions, including the importance of small differences in growth rates, the opportunities high growth provides, and others. The Fill command acts as a black box in that students do not need to understand compounding or geometric progressions.
CollapseLearning Goals
Students should understand how small differences in growth rates may result in large differences in GDP and well-being in the long run. Students also learn the Fill command in Excel, which is useful in a wide variety of applications.
Context for Use
- This assignment may be used at the introductory (Principles) or intermediate level of macroeconomics.
- This is a short assignment, designed to be completed in a few minutes either as a homework assignment or as a laboratory assignment. It should work for any size class.
- Students do not need any special skills to complete the assignment as long as the detailed instructions are given.
- The data are provided through 2009; additional data may be downloaded from the long below.
Description and Teaching Materials
Data on real GDP are obtained from the U.S. Bureau of Economic Analysis.
Files include
Files include
- Instruction sheet for projecting GDP (Microsoft Word 81kB Sep30 10)
- Started data spreadsheet for GDP projection (Excel 18kB Sep30 10) with necessary data (through 2009)
- Completed spreadsheet (Excel 21kB Sep30 10)
Teaching Notes and Tips
As noted above, this exercise should be easy to implement
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Assessment
It should be clear from discussion (or written answers to assessment questions) whether students understand the goal.