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GDP CONSUMPTION INVESTMENT

GOVERNMENT

SPENDINGS

NET

EXPORTS

2008-

2009

Q1 820423 483282 268379 79618 -10856

Q2 744426 470931 292824 70259 -89588

Q3 872170 542933 291724 117990 -80477

Q4 918171 504342 310576 131393 -28140

2009-

2010

Q1 1081422 687893 337817 125699 -69987

Q2 1092653 684909 363222 127296 -82774

Q3 1200270 758706 387531 164469 -110436

Q4 1244320 714902 470555 147370 -88507

2010-

2011

Q1 1186438 749266 396642 134161 -93631

Q2 1193368 745903 406494 135400 -94429

Q3 1356841 823744 417844 167573 -52320

Q4 1341676 772416 472304 154627 -57671

SUMMARY OUTPUT

Regression Statistics

Multiple R 1

R Square 1

Adjusted R Square 1

Standard Error 6.88386E-12

Observations 12

ANOVA

df SS MS F

Significance

F

Regression 4 4.59589E+11 1.14897E+11 2.42463E+33 4.5455E-116

Residual 7 3.31712E-22 4.73875E-23

Total 11 4.59589E+11

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Coefficients Standard Error t Stat P-value

Intercept -4.36557E-11 1.16525E-11

-

3.746477484 0.007201327

CONSUMPTION 1 4.16124E-17 2.40313E+16 5.7061E-113

INVESTMENT 1 6.02549E-17 1.65962E+16 7.6159E-112

GOVERNMENT

SPENDINGS 1 1.38671E-16 7.21134E+15 2.6041E-109

NET EXPORTS 1 7.98816E-17 1.25185E+16 5.4815E-111

Lower 95% Upper 95%

Lower

95.0%

Upper

95.0%

-7.12095E-11

-1.6102E-

11

-7.12095E-

11 -1.6102E-11

1 1 1 1

1 1 1 1

1 1 1 1

1 1 1 1

In the above data,

To study the impact of each of the component(C, I, G, X-M) on GDP, we have done multipleregression analysis on quarterly GDP data and its components from 2008 -2011.

Where,GDP is the dependant variable and C, I, G, X-M are the independent variables. The equation can be written as: Y=b0+b1x1+b2x2+b3x3+b4x4 In this equation,Y => GDP

X1 => Consumption Expenditure (C)

X2 =>Investment Expenditure (I)

X3 => Government Spending (G)

X4 => Net Exports (X-M)

And, b1; b2; b3; b4 are co-efficient of each variable respectively.

From the regression table above we know that Co-efficient of determination(R square) is10.00% which means that regression line explains 100.00% of variation in GDP due its

components and there is 2.07% error or unexplained variation by regression line.

Also the overall model is insignificant becausefcal >ftab (2.42463E

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o So, with 1 unit change in consumption expenditure,GDP will change by -4.36557units.

o Similarly, with 1 unit change in Investment Expenditure, Government Spending andNet Exports,GDP will change by 1.00, 1.00 and 1.00 units respectively.

At 5% level of significance when we see the range of each of the components exceptinvestment expenditu

r

e all other components viz. C, G and (X-M) shows auto-corr

elationamong them.

There is multi co-linearity in the above equation, which means that C, G and (X-M) havetimely impact on each other during their occurrence.

From this analysis we have studied the impact of each of the component(C, I, G, X-M)

on GDP. Also we came to know the part which regression line cannot explain can be due

to stocks valuation, subsidies and taxes, and various other components but overall we

see great impact on GDP due to the components considered above.

Source:

y CSO: PRESSNOTE-Q4 2010-11 30 May 2011