Chapter 4 Data Apps

Capital income and the stock market

Fig. 3: The S&P 500 stock price index

Switch scales with the buttons (on the ratio scale, equal distances are equal percentage changes) and drag the handles of the small chart under the axis to zoom in.

Sources. Data: Robert Shiller, U.S. stock market data (S&P composite index), read from the datahub.io copy up to August 2023 and extended with S&P Dow Jones Indices, S&P 500 (SP500), via FRED; deflated by the U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPIAUCNS), via FRED. Prepared file: data/ch04/fig4-3.csv (see the data notes). Chart: inspired by Fig. 4.3 in Jones (2024), Macroeconomics, 6th ed.

Fig. 3, other countries: real share prices around the world

Click a country in the legend to add it (try Japan’s 1989 bubble), switch scales with the buttons, and drag the small chart under the axis to zoom in.

Sources. Data: OECD, Main Economic Indicators, total share prices for all shares, via FRED (series SPASTT01{CC}M661N, where {CC} is the country code; the link opens the U.S. series), deflated by the Bank for International Settlements, long series on consumer prices; the S&P 500 line as in Fig. 3: Robert Shiller, U.S. stock market data (S&P composite index), read from the datahub.io copy up to August 2023 and extended with S&P Dow Jones Indices, S&P 500 (SP500), via FRED; deflated by the U.S. Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (CPIAUCNS), via FRED. Regions for the website menu: World Bank country and lending groups. Prepared files: data/ch04/share_prices.csv, data/ch04/fig4-3.csv, data/ch04/regions.csv (see the data notes). Chart: inspired by Fig. 4.3 in Jones (2024), Macroeconomics, 6th ed.

Comparing the model with the data

Fig. 4: Predicted per capita GDP in the production model

Move the slider to change the year and watch China climb the curve; click “Other countries” in the legend to show the rest of the sample.

Sources. Data: Penn World Table 11.0, Groningen Growth and Development Centre (DOI 10.34894/FABVLR), variables rgdpo (real GDP), pop (population) and csh_i (investment share); cite as Feenstra, Inklaar and Timmer (2015), “The Next Generation of the Penn World Table”, American Economic Review 105(10). Capital per person is our own perpetual-inventory estimate from PWT investment, and TFP is computed from it. The curve is the model’s prediction, \(y^* = k^{1/3}\). Prepared file: data/ch04/pwt_production.csv (see the data notes). Chart: inspired by Fig. 4.4 in Jones (2024), Macroeconomics, 6th ed.

Fig. 5: The model’s prediction for per capita GDP

Move the slider to change the capital exponent; with 1/3, almost every country lies above the 45-degree line, so the model predicts too much income.

Sources. Data: Penn World Table 11.0, Groningen Growth and Development Centre (DOI 10.34894/FABVLR), variables rgdpo (real GDP), pop (population) and csh_i (investment share); cite as Feenstra, Inklaar and Timmer (2015), “The Next Generation of the Penn World Table”, American Economic Review 105(10). Capital per person is our own perpetual-inventory estimate from PWT investment, and TFP is computed from it. Prepared file: data/ch04/pwt_production.csv (see the data notes). Chart: inspired by Fig. 4.5 in Jones (2024), Macroeconomics, 6th ed.

Total factor productivity

Fig. 6: The production functions of the U.S. and other countries

Move the slider to choose the country compared with the United States; the gap between its two points is the effect of its lower TFP.

Sources. Data: Penn World Table 11.0, Groningen Growth and Development Centre (DOI 10.34894/FABVLR), variables rgdpo (real GDP), pop (population) and csh_i (investment share); cite as Feenstra, Inklaar and Timmer (2015), “The Next Generation of the Penn World Table”, American Economic Review 105(10). Capital per person is our own perpetual-inventory estimate from PWT investment, and TFP is computed from it. Prepared file: data/ch04/pwt_production.csv (see the data notes). Chart: adapted from Fig. 4.6 in Jones (2024), Macroeconomics, 6th ed.

Fig. 7: Measuring TFP so the model fits exactly

Press the play button or move the slider to change the year; hover over the top right to find countries with higher TFP than the United States.

Sources. Data: Penn World Table 11.0, Groningen Growth and Development Centre (DOI 10.34894/FABVLR), variables rgdpo (real GDP), pop (population) and csh_i (investment share); cite as Feenstra, Inklaar and Timmer (2015), “The Next Generation of the Penn World Table”, American Economic Review 105(10). Capital per person is our own perpetual-inventory estimate from PWT investment, and TFP is computed from it. Prepared file: data/ch04/pwt_production.csv (see the data notes). Chart: inspired by Fig. 4.7 in Jones (2024), Macroeconomics, 6th ed.

Reform and growth: China and Russia

Fig. 8: Per capita GDP in China, Russia and around the world

Switch between the linear and ratio scale with the buttons, pick a region from the menu, then click a country in the legend to add it.

Sources. Data: Penn World Table 11.0, Groningen Growth and Development Centre (DOI 10.34894/FABVLR), variables rgdpo (real GDP), pop (population) and csh_i (investment share); cite as Feenstra, Inklaar and Timmer (2015), “The Next Generation of the Penn World Table”, American Economic Review 105(10). GDP per person is rgdpo / pop, in 2021 dollars. Regions for the website menu: World Bank country and lending groups. Prepared files: data/ch04/pwt_production.csv, data/ch04/regions.csv (see the data notes). Chart: inspired by Fig. 4.9 in Jones (2024), Macroeconomics, 6th ed.