Assignment 1

Name: Philipp Maurer

Matr.-Nr.: 08-054-918
E-Mail: P.Maurer@stud.unibas.ch
Question 1:
1.a)
Xtn+1 = Xt*(1+g)^n
2 = (1+0.04)^n
ln(2) = n*ln(1.04)
n = ln(2)/ln(1.04)
n = 17.67 ! 18
or:
doubling time ! 72/g
72/4 = 18
1.b)
Xtn+1 = Xt*(1+g)^n
2 = (1+g)^15
ln(2) = 15*ln(1+g)
2^(1/15) = 1+g
g = 2^(1/15)-1
g ! 0.47 = 4.7%
or:
doubling time ! 72/g
72/g = 15
g = 72/15 = 4.8%
1.c)
Xtn+1 = Xt*(1+g)^n
2 = (1+g)^n
ln(2) = n*ln(1+g)
n = ln(2)/ln(1+g)
or using the rule of 72 as an approximation:
doubling time ! 72/g
1.d)
Xtn+1 = Xt*(1+g)^n
2 = (1+g)^n = (1+r)^t
ln(2) = t*ln(1+r)
t = ln(2)/ln(1+r)
When r is small ln(1+r) ! r
t = 0.693147/r ! n = 70/g
(Note: r would for example be 0.04 while g would for example be 4)

1.e)
8000.00

7000.00

6000.00

5000.00
Reihe1

4000.00

Reihe2

3000.00

2000.00

1000.00

0.00
1

7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79

The absolute difference between the two is increasing in time.

4.00

3.50

3.00
Reihe1
Reihe2
2.50

2.00

1.50
1

7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79

The relative difference in growth actually remained the same, since both series have had an
annual growth rate of 4%.
Question 2:
2.a)
GDP per capita in country A: 16*1.5+4*3.0 = 36
GDP per capita in country B: 4*1.0+1*1.0 = 5
2.b)
1.5/1.0 = 1.5 (country A/country B)
2.c)
GDP per capita in country B using market exchange rate: 4*1.5+1*1.5 = 7.5
36/7.5 = 4.8 (country A/country B)

2.d)
4*1.5+1*3.0 = 9
4*1.0+1*1.0 = 5
9/5 = 1.8 (country A/country B)
2.e)
36/(5*1.8) = 36/9 = 4 (country A/country B)
Question 3:
3.a)
Histogramm
35
30

Hufigkeit

25
20
Hufigkeit
15
10
5

00
0
gr

er

un

50

45

00

0
40

00

00

35

0
00

30

25

00

00

20

00

15

00

10

50

00

Klasse

Histogramm
20
18
16

12
10

Hufigkeit

8
6
4
2

Klasse

er

0
00

gr

un

50

00
45

40

00

00
35

00

00

30

0
25

00

20

00

15

0
00

10

00

0
50

Hufigkeit

14

3.b)
Countries generally seem to have gotten richer. However a gap has opened up between
countries with rgdpl below 15000 and those over: The difference between the richest and the
poorest has become greater.
3.c)

growth rate over the time period 1970 to

2004

1200
1000
800
600

Reihe1
Linear (Reihe1)

400
200
0
0

5000

10000 15000 20000 25000

-200
real GDP per capita 1970

The trend seems to indicate that countries with a low rgdpl have higher growth rates, however
this is mainly because of very few of these countries who have experienced extremely high
growth rates.
3.d)
Histogramm
20
18
16

Hufigkeit

14
12
10

Hufigkeit

8
6
4
2

er

7
un

gr

-1

-2

-3

Klasse

The vast majority of countries (71%) have annualized growth rates between 0.0% and 4.0%.
The Histogram also looks like a Gaussian Distribution.

3.e)
1.4

Percentage of World Population

1.2
1
0.8
0.6
0.4
0.2
0
0

0.2

0.4

0.6

0.8

1.2

-0.2
-0.4
Percentage of GDP relative to the highest

Reihe1
Logarithmisch (Reihe1)

3.f)
65% percent of the population live in countries whose relative income per capita compared to
the highest is 20% and less.
3.g)
5333.39166*1.0851076024^n = 29275.7994*1.0082387389^n
n = 23.175 ! 24
China would have overtaken Switzerlnad at the beginning of the year 2028 if both countries
continued to grow at the annualized rates.