Statistical Decision Making

Take Home Midterm for Statistical Decision Making

Due November 29. 2016

The following model should be used for projecting the GDP by expenditure data to 2020 for your country:

1. Production Function:

Incremental Capital-Output Ratio (ICOR) = 1/b

Growth Rate of GDP =

If b<0 use ln(Y) = a + b year to estimate Ry.

2. Consumption Function: C = a + b Y

If a<0 or b>1 or the t-value for b is not > 2 (absolute value) use the average propensity to consume from 2010 to 2014 instead of the equation.

3. Import Function: M = a + b Y

If a<0 or b>1 or the t-value for b is not > 2 (absolute value) use the average propensity to import from 2010 to 2014 instead of the equation.

4. Export Function: ln(X) = a + b year

Your report should be printed in a WORD document. It should follow the format shown for Australia which is below.

Please observe the decimal place conventions for each table as demonstrated below.

Name___________Campano______________Country Australia

1. Production Function: 674526.4 + 0.098021

(t=116.9) (t=30.11) R sq = .986

ICOR = 1/.098021 = 10.20188,

I/Y = average share from 2010 to 2014= 31.22853

Growth rate of Y = 31.22853/10.20188=3.061055

2. Consumption Function: C= -41927.2 + 0.621904 Y

(t=-4.15) (t=50.19) R sq = .995

Wrong sign for “a” coefficient: C=.5764805Y substituted (average Propensity to consume from 2010 to 2014)

3. Import Function: M = -244987 + 0.536144Y

(t=-10.3) (t=18.5) R sq = .963

Wrong sign for “a” coefficient: M=.2729894Y substituted (average Propensity to import from 2010 to 2014)

4. Export Function: lnX =-51.9519 + 0031866 Year

(t=-12.4) (t = 15.3)

	Australia	GDP by	Expenditure	2005	US $

Year	Y	C	G	I	X	M	Yt+1	ΣI	ln X
2000	642915	356746	111993	137557	140097	103477	667752	137557	11.85009
2001	667752	369036	115492	149155	138968	104899	688314	286712	11.842
2002	688314	382881	118996	165935	139244	118743	716924	452647.6	11.84398
2003	716924	401594	124023	184858	140930	134482	739984	637505.9	11.85602
2004	739984	419616	128015	197887	145630	151164	762114	835392.8	11.88882
2005	762114	432967	132033	210886	149345	163117	790771	1046279	11.91401
2006	790771	453645	136239	225571	155151	179835	820047	1271850	11.95216
2007	820047	475741	140573	248925	160663	205856	834249	1520775	11.98707
2008	834249	475248	146610	247232	163476	198317	850620	1768007	12.00442
2009	850620	487278	149255	253278	171879	211070	870367	2021285	12.05454
2010	870367	507665	154326	267614	173474	232713	902813	2288899	12.06379
2011	902813	523454	160283	296537	182203	259663	925491	2585435	12.11287
2012	925491	533495	160255	300114	193085	261459	949051	2885550	12.17089
2013	949051	544710	164110	291823	204251	255844	975012	3177373	12.2271
2014	975012	554708	167445	286390	217897	251427			12.29178
		Projected
2015	1004858	579281	175411	313802	210679	274316			12.25809
2016	1035617	597013	180408	323408	217500	282712			12.28996
2017	1067318	615288	185546	333308	224543	291366			12.32182
2018	1099989	634122	190828	343510	231813	300285			12.35369
2019	1133660	653533	196260	354025	239319	309477			12.38555
2020	1168362	673538	201844	364862	247068	318951			12.41742

Australia

Of GDP

Year

2000

100

55.5

17.4

21.4

21.8

16.1

2001

100

55.3

17.3

22.3

20.8

15.7

2002

100

55.6

17.3

24.1

20.2

17.3

2003

100

56.0

17.3

25.8

19.7

18.8

2004

100

56.7

17.3

26.7

19.7

20.4

2005

100

56.8

17.3

27.7

19.6

21.4

2006

100

57.4

17.2

28.5

19.6

22.7

2007

100

58.0

17.1

30.4

19.6

25.1

2008

100

57.0

17.6

29.6

19.6

23.8

2009

100

57.3

17.5

29.8

20.2

24.8

2010

100

58.3

17.7

30.7

19.9

26.7

2011

100

58.0

17.8

32.8

20.2

28.8

2012

100

57.6

17.3

32.4

20.9

28.3

2013

100

57.4

17.3

30.7

21.5

27.0

2014

100

56.9

17.2

29.4

22.3

25.8

Projected

2015

100

57.6

17.5

31.2

21.0

27.3

2016

100

57.6

17.4

31.2

21.0

27.3

2017

100

57.6

17.4

31.2

21.0

27.3

2018

100

57.6

17.3

31.2

21.1

27.3

2019

100

57.6

17.3

31.2

21.1

27.3

2020

100

57.6

17.3

31.2

21.1

27.3

	Australia

Year	Y	C	G	I	X	M
2009	1.96	2.53	1.80	2.45	5.14	6.43
2010	2.32	4.18	3.40	5.66	0.93	10.25
2011	3.73	3.11	3.86	10.81	5.03	11.58
2012	2.51	1.92	-0.02	1.21	5.97	0.69
2013	2.55	2.10	2.41	-2.76	5.78	-2.15
2014	2.74	1.84	2.03	-1.86	6.68	-1.73
	projected
2015	3.06	4.43	4.76	9.57	-3.31	9.10
2016	3.06	3.06	2.85	3.06	3.24	3.06
2017	3.06	3.06	2.85	3.06	3.24	3.06
2018	3.06	3.06	2.85	3.06	3.24	3.06
2019	3.06	3.06	2.85	3.06	3.24	3.06
2020	3.06	3.06	2.85	3.06	3.24	3.06