USA: +1 718 717 2861 
Sign in
a.Plot the GDP data in current and constant (i.e., 1992) dollars against time.
b.LettingYdenote GDP andXtime ( with 1 for 1959, 2 for 1960, through 39 for 1997), see if the following model ts the GDP data:
Yt=1 +2Xt+ut
Estimate this model for both current and constant-dollar GDP.
c.How would you interpret2?
d.If there is a difference between2estimated for current-dollar GDP and that estimated for constant-dollar GDP, what explains the difference?
TABLE3.8NOMINAL AND REAL GDP, UNITED STATES, 19591997
| Year | NGDP | RGDP | Year | NGDP | RGDP |
| 1959 | 507.2000 | 2210.200 | 1979 | 2557.500 | 4630.600 |
| 1960 | 526.6000 | 2262.900 | 1980 | 2784.200 | 4615.000 |
| 1961 | 544.8000 | 2314.300 | 1981 | 3115.900 | 4720.700 |
| 1962 | 585.2000 | 2454.800 | 1982 | 3242.100 | 4620.300 |
| 1963 | 617.4000 | 2559.400 | 1983 | 3514.500 | 4803.700 |
| 1964 | 663.0000 | 2708.400 | 1984 | 3902.400 | 5140.100 |
| 1965 | 719.1000 | 2881.100 | 1985 | 4180.700 | 5323.500 |
| 1966 | 787.7000 | 3069.200 | 1986 | 4422.200 | 5487.700 |
| 1967 | 833.6000 | 3147.200 | 1987 | 4692.300 | 5649.500 |
| 1968 | 910.6000 | 3293.900 | 1988 | 5049.600 | 5865.200 |
| 1969 | 982.2000 | 3393.600 | 1989 | 5438.700 | 6062.000 |
| 1970 | 1035.600 | 3397.600 | 1990 | 5743.800 | 6136.300 |
| 1971 | 1125.400 | 3510.000 | 1991 | 5916.700 | 6079.400 |
| 1972 | 1237.300 | 3702.300 | 1992 | 6244.400 | 6244.400 |
| 1973 | 1382.600 | 3916.300 | 1993 | 6558.100 | 6389.600 |
| 1974 | 1496.900 | 3891.200 | 1994 | 6947.000 | 6610.700 |
| 1975 | 1630.600 | 3873.900 | 1995 | 7269.600 | 6761.700 |
| 1976 | 1819.000 | 4082.900 | 1996 | 7661.600 | 6994.800 |
| 1977 | 2026.900 | 4273.600 | 1997 | 8110.900 | 7269.800 |
| 1978 | 2291.400 | 4503.000 |
Note: (current dollars in billions).
(1992 billions of dollars).
Source: Economic Report of the President,1999, Tables B-1 and B-2, pp. 326328.
e.From your results what can you say about the nature of ination in the United States over the sample period?
