Growth and fluctuations: some economic history This chapter...

Growth and fluctuations: some economic history This chapter is the culmination of our theory of macroeconomic fluctuations. When economists think about history, fluctuations often stand out-oil shocks and stagflation in the 1970s, a recession followed by a long expansion in the 1980 s, a recession followed by an extraordinary low unemployment, low inflation boom in the 1990 s. This question puts these fluctuations into some perspective. Go to the website of the Reserve Bank of Australia (www.rba.gov.au), click 'Statistics', 'Statistic Tables' and select Table G10'. Retrieve the quarterly real GDP in chained (2009/10) dollars. Get real GDP for the fourth quarter of 1959, 1969, 1979, 1989, 1999, 2009 and for the fourth quarter of the most recent year available. a. Using the real GDP numbers for 1959 and 1969, calculate the decadal growth rate of real GDP for the $1960 \mathrm{~s}$. Do the same for the 1970s, 1980s, 1990s, $2000 \mathrm{~s}$ and for the available years of the 2010s. b. How does growth in the 1970 s compare to growth in later decades? How does growth in the 1960 s compare to the later decades? Which decade looks most unusual? We will learn more about the differences in postwar growth rates over long periods of time, in particular before and after 1973, in Chapters 10 to 13 .

Growth and fluctuations: some economic history
This chapter is the culmination of our theory of macroeconomic fluctuations. When economists think about history, fluctuations often stand out-oil shocks and stagflation in the 1970s, a recession followed by a long expansion in the 1980 s, a recession followed by an extraordinary low unemployment, low inflation boom in the 1990 s. This question puts these fluctuations into some perspective.
Go to the website of the Reserve Bank of Australia (www.rba.gov.au), click 'Statistics', 'Statistic Tables' and select Table G10'. Retrieve the quarterly real GDP in chained (2009/10) dollars. Get real GDP for the fourth quarter of 1959, 1969, 1979, 1989, 1999, 2009 and for the fourth quarter of the most recent year available.
a. Using the real GDP numbers for 1959 and 1969, calculate the decadal growth rate of real GDP for the $1960 \mathrm{~s}$. Do the same for the 1970s, 1980s, 1990s, $2000 \mathrm{~s}$ and for the available years of the 2010s.
b. How does growth in the 1970 s compare to growth in later decades? How does growth in the 1960 s compare to the later decades? Which decade looks most unusual?
We will learn more about the differences in postwar growth rates over long periods of time, in particular before and after 1973, in Chapters 10 to 13 .

Key Concepts

Chained Dollars

Chained dollars are a method used to adjust economic data for inflation by linking constant-price series over time. This approach facilitates more accurate comparisons of real economic values across different periods and provides a clearer picture of economic growth.

Decadal Growth Rate

The decadal growth rate is a metric used to measure the percentage change in real GDP over a ten-year period. This concept helps in assessing long-term trends in economic performance and comparing growth across different decades.

Economic History Analysis

Economic history analysis involves examining historical economic data to understand long-term trends, structural changes, and the impact of major economic events. This analysis helps to contextualize current economic conditions and informs discussions about periods of unusual or significant economic performance.

Real GDP

Real GDP is an inflation-adjusted measure of a country's output that reflects the true value of goods and services produced over time by using constant prices. This concept allows economists to compare economic performance across different periods without the distortion caused by changing price levels.

Macroeconomic Fluctuations

Macroeconomic fluctuations refer to the short-term variations in overall economic activity, including expansions and contractions in the economy. Understanding these fluctuations is essential for analyzing periods of recession, recovery, and unusual economic events such as stagflation.

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