where [[alpha].sub.Y,G] is the public spending to real GNP
multiplier and [[alpha].sub.Y,T;t] is the fiscal revenues to real GNP
In referring to the Table for the Canadian economy over the period 1997-2011, the average growth of the money supply was 9.02 per cent, while the average growth rate of real GNP
was 3.27 per cent.
We use both the business-cycle chronology of the NBER and expansions and recessions defined from HP-filtered real GNP
. For NBER reference dates, we examine the lengths of expansions (periods from troughs to peaks), the lengths of recessions (periods from peaks to troughs), and the ratio of the length of an expansion to the length of the following recession.
Using finite-sample critical values, they rejected the unit root null in favor of the two-break alternative for five series (real GNP
, nominal GNP, per capita real GNP
, industrial production, and employment) at a 5% significance level.
Figure 10 plots the contributions to the change in real GNP
per capita made by nine factors.
In each case for real GNP
(or GDP) and GNP (or GDP) Deflator, BVAR estimates are made of eight future logarithmic first differences.
The disparity in real GNP
growth projections among the early 1981 forecasts grew for the "out years," 1983 and 1984.
The problem which this commentator seems not to appreciate is that abandoning Assertion 3 would require re-educating every student who ever took a principles of economics course and revamping the system of national income accounts, where evaluation at constant prices is considered an acceptable measure of real GNP
. Consider the following definitive (and altogether typical and unremarkable) passage from Samuelson and Nordhans (pp.
ECONOMIC ACTIVITY Average Number and Indicator of Correlation Author of Studies/ NAPM Index Economic Activity (R) [a] Study Period Previous Research PMI Percent change in 0.84 [b] 2, Bretz, (1990) (annual average) Real GDP, 4 qtr 1953-1987 to 4 qtr PMI Percent change in 0.910 [b] 5, McKittrick, (annual average) Real GDP, 4 qtr (1994-1997) to 4 qtr 1976-1996 PMI Percent change in 0.76 [b] 1, Dasgupta-Lahiri, Real GNP
, 4 qtr (1991) 1953-1986 to 4 qtr Current Study [b] PMI Quarterly percent 0.878 3/70-6/92 change in Real GNP
Production Quarterly percent 0.900 3/70-6/92 change in Real GNP
New Orders Quarterly percent 0.888 3/70-6/92 change in Real GNP
Forecasting Quarterly percent 0.742 3/70-6/92 Index [c] change in Real GNP
Such a possibility may be investigated within a trivariate framework including other important variables (for example, the unemployment rate) which represent considerable determinants of budget deficits and real GNP
. Thus, the cointegration regressions are specified as:
where [y.sub.t] measures the level of real economic activity, for example real GNP
or the level of employment; [u.sub.t] measures the level of inflation uncertainty; [z.sub.t] is a vector of stationary variables; sometimes including a price or money supply surprise term; and [[Epsilon].sub.t] is a random error term.(2) Now, suppose that there is a shock to [u.sub.t].
The four variables are real GNP
growth (Y), the rate of inflation as measured by the GNP deflator (P), the unemployment rate (U), and the 90-day Treasury bill rate (R).(2) The number of lags included in VAR models is often determined on an ad hoc basis.