Question

Real Gross Domestic Product (Real GDP), inflation rate and unemployment are important indicators in measuring the economic performance of a country. In this assignment, you are required to choose a country and explain its economic performance.

1. First, you will have to find and compile the data of Real GDP, unemployment rate and inflation rate from 1980 to 2010 for the chosen country.
2. Based on the data from question (a), draw a table to show the data for the three variables. Draw also a line graph for Real GDP and the second line graph that shows the unemployment rate and inflation rate (both variables in the same second line graph).
3. Explain the country's macroeconomic experience of economic growth rate (based on Real GDP data), unemployment and inflation between 1980 and 2010. Your explanation can also include policies implemented by the government and/or central bank of the country to increase economic growth rate and to remedy unemployment and inflation, if any, or any other relevant information for the three variables.

Additional information:

• Each group must consist of 3-4 members.
• All data are available in http://databank.worldbank.org/. e.g
  • Real GDP = Gross Domestic Product (Constant price USD)
  • Inflation rate = % Changes in Consumer Price Index (CPI)
  • Unemployment rate = % of Unemployment (Total labour force)

Answer 1

	19801990	1990-2000	2000-2010
Unemployment rate	8.3%	5%	4%
Inflation	11%	8%	3-4%
Real GDP	4.4%	5.5%	7.1%

Ans ) I choose here, the country is India. India shows a remarkable growth among the developing countries. On the eve of independence India was facing not only starving problem but also the problem related to health and education etc. After the independence India shows a large change in terms of real GDP growth ,per capita growth but the most of the change comes after the implementation of LPG policies in 1990s. During 1970-1980s the average growth was 4.4% and it accelerated to 5.5% during 1990s early 2000s and further to 7.1 % in past one decade. The acceleration of growth is evident not just for aggregate GDP but even more strongly for per capita GDP.

The relationship between inflation and unemployment is always negative according to Phillips curve,i.e if inflation increase then the unemployment rate will decrease. But in context to India in 1980s unemployment rate was high and inflation rate was aalo high after 1990s the unemployment rate starts decreasing and inflation rate starts decreasing because of globalization, privatisation in the economy. In 200s India enjoyed stable growth period in terms of both inflation and unemployment as inflation was low as well as unemployment was also not that much high. From 2004-2008 India shows growth in every sector i.e saving rate of households was around 33% unemployment rate was low growth rate was around 8%. Govt. of India implemented many policies for growth and development in all sector. But main focus was on agriculture, industry and people below poverty line during 1990s As the inequality rate has increased in this period the death rate was also so high , after the implementation of various policies related to health compulsory education till the age of 14etc . gives positive result in declining rate of poverty , malnutrition, illiteracy etc. India shows a remarkable growth in the world as now it has increased FDI around the world because of ease of doing policies and many more policies which shows positive result after long period.