Sunday, June 12, 2011

U.S. GDP from 1870-2010 and Trend

Below, Corrections offers its own version of the now relatively-famous graph in Robert Lucas's presentation using Angus Maddison's data (under "Historical Statistics").  
The mean-reverting nature of log GDP under a very slow-moving trend supports the idea of the absence of a "unit root" in U.S. GDP.

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