Using the FRED database, locate the Congressional Budget Offices measure of potential GDP by searching for GDPPOT.
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Using the FRED database, locate the Congressional Budget Office’s measure of potential GDP by searching for “GDPPOT.” Using the “Add Data Series” option, add the series “GDPA” (real annual GDP) to this graph. Adjust the sliders to show the data from around 1985 to the present.
(a) Display the graph.
(b) The Congressional Budget Office uses a version of the Solow model to create its potential output measure. Download a graph of the “investment share of GDP” (for gross private domestic investment) and display those data graphically since 1990.
(c) How does this second graph help you understand the first graph in terms of the data since the Great Recession?
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a b c As Chad writes in the textbook the slowdown in investment means a slowdown i...View the full answer
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