Economic Data Analysis

This workbook contains 3 questions. Each question is designed to test your

knowledge, understanding and application of key concepts and techniques

introduced to you during the lectures and computer laboratories.

Marks are awarded on the basis of providing the correct answer to each question

and for the presentation, explanation and interpretation of your findings.

All graphs, tables and charts should be titled. All data sources should be cited where

appropriate.

You should answer all questions. Each question carries equal weight.

The completed coursework should be submitted no later than 4pm Tuesday 25th of

November 2014.

Please note that all assignments should be submitted electronically on Surreylearn

in the assignment unit of the module. No hard copies submissions will be accepted.

Any assignments submitted after 4.00pm will be subject to the University’s late

submission penalties There is no need to attach your excel calculations.

Hint for graphs: Make sure that in the graphs you distinguish each different series

using different line colors/styles and/or markers Go to the OECD website (stats.oecd.org), browse in the Labour theme for

Labour Force Statistics>Short Term Statistics>Short-Term Labour market

statistics>Unemployment Rates by age and gender. Find youth

unemployment data expressed as a percentage of the youth labour force

(age 15-24). Download the data in Excel format selecting an annual time

frequency for the period 2000-2013 (Hint: you can do that clicking on

‘customise’).

a) Plot in the same graph the youth unemployment series for the United

Kingdom, United States, Italy, Spain and Netherlands. Use your judgment

to find the best graphs that summarise those data. [20 marks]

b) Now drop the following countries from the dataset: ï‚· Australia, Canada, Chile, Israel, Japan, Korea, Mexico, New Zealand, United States, Euro Area, European Union, OECDTotal This should leave you with a final sample of 25 countries. Use your judgment to find the best graphs that summarises ONLY the 2006 and 2013 youth unemployment rates for each of the 25 countries in the dataset (hint: you should use a single graph). [20 marks]

c) Using the same 25 countries as above find out in which country the youth unemployment increased the most and in which country decreased the most between 2006 and 2013. (Report numbers up to the 2nd decimal place only!) [20 marks]

d) Using the same 25 countries as above report descriptive statistics for 2006 and 2013 separately and comment on any differences between them (hint: report the statistics in a table). [20 marks]

e) Use the 2013 data for the group of 25 countries to generate a histogram based on bins (class intervals) of 4 percent. Report the frequency table and histogram. Comment on the shape of the distribution and compare these findings with those of the descriptive statistics you discussed in part

d). [20 marks]2.

A) You are given the following information regarding the prices and quantities of three goods consumed by a small island nation across two years.

2008 2010

Price Quantity Price Quantity

Fish 650 10 680 12

Potatoes 30 260 35 250

Milk 32 200 34 190

a. Input the above data into a Microsoft Excel spreadsheet

b. If 2008 is denoted as the base year (2008 =100):

i. Calculate a simple average index for 2010

ii. Calculate a simple aggregate index for 2010

iii. Calculate the Laspeyres price index for 2010

iv. Calculate the Paasche price index for 2010

v. The Laspeyres quantity index for 2010

vi. The Paasche quantity index for 2010

Report each index up to the second decimal place.

𝑆𝑖𝑚𝑝𝑙𝑒 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑑𝑒𝑥 =

? 𝑃𝑖

𝑛

𝐿𝑎𝑠𝑝𝑒𝑦𝑟𝑒𝑠𝑃𝑟𝑖𝑐𝑒 𝐼𝑛𝑑𝑒𝑥 =

? 𝑃𝑡𝑄0

? 𝑃0 𝑄0 𝑆𝑖𝑚𝑝𝑙𝑒 𝐴𝑔𝑔𝑟𝑒𝑔𝑎𝑡𝑒 𝐼𝑛𝑑𝑒𝑥 =

? 𝑃𝑡

? 𝑃0

(100) 𝑃𝑎𝑎𝑠𝑐ℎ𝑒 𝑃𝑟𝑖𝑐𝑒 𝐼𝑛𝑑𝑒𝑥 =

? 𝑃𝑡𝑄𝑡

? 𝑃0 𝑄𝑡

(100)

Pi refers to the ratio between Pt and P0 hence ? 𝑃𝑖=?

𝑃𝑡

𝑃0

. n is the number of goods.

P0 and Pt refer to the price in the base period (2008) and current period (2010)

respectively.

Q0 and Qt refer to the quantity in the base period (2008) and current period (2010)

respectively.

The ONS has recently updated the base year they use to calculating a particular price

index. The data for this index is provided below.

Year Old index

base year

2000

New index

base year

2005

Spliced

index base

year 2000

Spliced

index base

year 2005

2000 100 100

2001 102 102

2002 103 103

2003 103 103

2004 105 105

2005 107 95 107 95

2006 100 100

2007 101 101

2008 105 105

2009 108 108

Utilise the above information to splice the index to create a consistent series with:

i) 2000 as the base year

ii) 2005 as the base year 3. Download annual GDP at current and constant prices (in LCU=Local currency

units) from the World Bank dataset for the following years and countries:

ï‚· 1970-2013

ï‚· France, Germany, Italy, Spain, UK and USA

a) For the period 1970-2013 calculate and report in a table the following

growth rates of GDP at constant prices:

a. Long average rate

b. Mean annual rate

c. Mean ln annual rate

d. Ln approximation rate

e. Annual compound rate

(Report numbers up to the 2nd decimal place only!) [25 marks]

b) Calculate the implicit price deflator for each country for the period 1970-

2013 and rebase it using 2003 as the base year. Plot them on the same

graph and use the logarithmic scale for the vertical axis. [25 marks]

c) Compute the growth rate of inflation using the formula:

where P stands for the GDP deflator (base year 2003) and plot them on

the same graph for the period 1971-2013. [25 marks]

d) Which country had the highest inflation value over the sample? Which

country had the highest standard deviation of inflation over time? [25

marks]