Project of Globalization
Autor: Sara17 • December 10, 2018 • 2,660 Words (11 Pages) • 612 Views
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Corporate Profits
As far as corporate profits are concerned, profits from current production decreased by 12.5B$ (they increased by 66.0B$ in the first quarter).
Profits of domestic financial corporations increased by 5.6B$ in the second quarter (they increased by 8.1B$ in the first quarter).
Profits of domestic non-financial corporations decreased by 56.1B$ (they increased by 84.8B$ in the first quarter).
The Rest-of-the-world component of profits increased by 38.0B$ (they decreased by 26.9B$ in the first quarter), because of higher exports and slightly higher imports.
3.b)[pic 2]
[pic 3]
3.c)
Forecast for the real GDP growth rate between the second and third quarters of 2016.
US GDP growth can be simplified through a yearly 2% increase since 1880: on the long term, the US have been growing constantly, thanks to an increase in both inputs and production efficiency. Moreover, the 2% growth rate takes into consideration also the recession periods (i.e. 1929, as well as the 2007-08 financial crisis), which means that overall it is a good representation of the trend in GDP growth.
If we consider present data, starting from 2005 the quarters with a negative growth rate were only 7 out of 46, which is a 15% of the cases, mainly concentrated during the recession in 2007-08. Isolated cases of negative growth are therefore sporadic events.
During the third quarter just ended, there were no evidence of any kind of crisis (economic/politic/environmental), so it is not likely that the GDP growth turns dramatically negative.[pic 4]
Considering past data, our opinion is that the GDP growth rate for the third quarter would be included between 0,2080% and 1,2181%, which are the minimum and maximum observed data starting from 3Q2014. In fact, we computed the average of the last 8 quarters, from 2014Q3 to 2016Q2 (equal to 0,5270%), to have a benchmark for our forecast, as well as the yearly rate for 2014 (2,4870%) and 2015 (1,8781%), confident that the growth rate for the 3rd quarter in 2016 will be connected with recent data. In 2016, the observed growth in the first 2 quarters is equal to 0,5603%, so it is likely to increase if we compare it with previous years’ growth rate.
Furthermore, we analysed the trend linked to the 3rd quarter among the years, to assess if the US economy was particularly outstanding positively or negatively between July and September compared to the other quarters. The result was that in the last 11 years, the average growth observed in the 3rd quarter was equal to 0,4488%, considering also a negative case during the economic recession; besides, starting from 2005 the isolated cases of negative GDP growth have never happened during the 3rd quarter.
Finally, to increase the exactitude of our forecast, we developed a regression analysis on excel, using past data as inputs. The result of this process indicates as possible the next growth rate equal to 0,456%.
Taking in consideration all the measures calculated, our prediction is that GDP growth during the 3rd quarter will be approximately equal to 0,42%-0,43%, slightly inferior to our regression. This can be explained through a deeper assessment of the current economic situation, and the recent GDP growth: starting from 4Q2015 the growth rate has been closer to zero compared to previous years, so we expect a lower value related to the existing trend.
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4) GROWTH RATES
1.
g
ln(1+g)
g
[pic 5]
0
0.000000000
0.00
0.000000000
0.05
0.048790164
0.05
0.05127109638
0.1
0.095310180
0.1
0.1051709181
0.15
0.139761942
0.15
0.1618342427
0.2
0.182321557
0.2
0.2214027582
0.25
0.223143551
0.25
0.2840254167
0.3
0.262364264
0.3
0.3498588076
0.35
0.300104592
0.35
0.4190675486
0.4
0.336472237
0.4
0.4918246976
0.45
0.371563556
0.45
0.5683121855
0.5
0.405465108
0.5
0.6487212707
0.55
0.438254931
0.55
0.7332530179
0.6
0.470003629
0.6
0.8221188004
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