ECON 201 Real G.D.P. analysis

Trends in the Gross Domestic Product that have occurred during the period

The purpose of this essay is to provide a trend and a systematic analysis of the economic growth as presented on the United States Bureau of Economic Analysis. Periods that experienced high growth are described. Furthermore, periods that experienced the lowest growth rate are also described. Based on the above, the economic growth in real G.D.P. for this current year is predicted. Primary causes of the prediction are also given.

Trends in the Gross Domestic Product that have occurred during the period

The trend is shown in the fourth quarter and the year 2021. Estimates for 2021 are in advance. The years shown are 2018, 2019, 2020 and 2021 (Bureau of Economic Analysis, 2021). The trend shown is the partially horizontal slope. Except for 2020 and 2021, all the other years show a slow growth rate. For example, in 2018, the real G.D.P. percentage change from the preceding quarter shows figures that range from 2%, 3%, 1% and 0.5%.

In the first two quarters, there is an increasing growth in the real G.D.P. while in the second quarter there is a decrease. 2019 follows the same growth rate as 2018. All the percentage values for that year are below 5%. In that year, the highest percentage change preceding the previous year was lower than a half of 5, or lower than 2.5%.

Period experiencing most significant growth

Significant growth is a period in a nation's economic growth where the difference between the lowest period of growth and the highest recorded growth is the highest (Bureau of Economic Analysis, 2021). This growth is seen in the business life cycle, and a period of decline occurs after a period of this growth (Churchill & Lewis, 2015). According to the graph, the most significant period occurred from the last quarter of 2019 to the third quarter of 2020. In the third quarter of 2020, the percentage change was 35%, and the growth in the last quarter of 2019 was 1%. This shows a huge increase of about 29%.

Period experiencing the least amount of growth

The period that showed the least amount of growth is between the first quarter and the second quarter of 2020, where growth, already negative, went from -5% to -35%. This is a negative growth period in which there is little economic activity (Bureau of Economic Analysis, 2021).

Prediction of the real G.D.P. during the duration of this year

During the duration of this year, specifically in the first quarter of 2022, the growth rate in real Gross Domestic Product will ease and remain stagnant between 4.1% and 5.5% (Choudhury, 2022). The rise in inflation, the increase in the income inequalities among the people and a dire situation where many countries will prevent the economy from rising further than 5% compared to the previous period.

The United States of America will be the most affected economy in this scenario. China, one of the fastest-growing economies globally, will have a slowed and quite stable real G.D.P. growth of 5.1 (Choudhury, 2022). This is because, despite there being a recovery in the industries in the nation, there are still high-level effects of the pandemic, and the country has increased its hold on fiscal growth and regulation. The introduction of higher monetary support may benefit the nations, but this will occur more slowly than anticipated.

References

Bureau of Economic Analysis. (2021). Gross Domestic Product, Fourth Quarter and Year 2021 (Advance Estimate) | U.S. Bureau of Economic Analysis (B.E.A.). Www.bea.gov. https://www.bea.gov/news/2022/gross-domestic-product-fourth-quarter-and-year-2021-advance-estimate

Choudhury, S. R. (2022, January 12). World Bank slashes global growth forecast and warns about growing inequality. CNBC. https://www.cnbc.com/2022/01/12/world-bank-slashes-2022-global-growth-forecast.html

Churchill, N., & Lewis, V. (2015, November 18). The Five Stages of Small Business Growth. Harvard Business Review. https://hbr.org/1983/05/the-five-stages-of-small-business-growth