Macroeconomic Performance of Australia and USA

The paper includes the macroeconomic performance of the United States of America and Australia. The first part of the paper comprises of the summary statistics of the values of the different macroeconomic indicators taken from the year 1995 to 2015. The next part of the paper consists of the pairwise graph between the various macroeconomic indicators.

Running head: ECONOMICS
Economics
Name of the student
Name of the university
Author note

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Table of Contents
Executive summary....................................................................................................................2
Macroeconomic performance of Australia and USA.................................................................2
Pair wise graphs of macroeconomic indicators..........................................................................3
Role of government’s monetary and fiscal polices..................................................................14
Macroeconomy of Australia.....................................................................................................16
Conclusion................................................................................................................................17
Reference list............................................................................................................................18

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Executive summary
The paper includes the macroeconomic performance of the united states of America and
Australia. The first part of the paper comprises of the summary staistics of the values of the
different macroeconomic indicators taken from the year 1995 to 2015. The values for which
have been obtained for various macroeconomic indicators are the growth of the real gross
domestic product, rate of inflation, rate of unemployment, interest rate, net exports and the
exchange rate. The next part of the paper consists of the pairwise graph between the various
macroeconomic indicators.
Macroeconomic performance of Australia and USA
Real GDP growth of Australia and USA
Column1
REAL GDP GROWTH RATE OF
AUSTRALIA
Mean -0.07749512
Standard Error 0.221400338
Median -0.081144834
Mode #N/A
Standard Deviation 1.01458381
Sample Variance 1.029380307
Kurtosis -0.008634789
Skewness 0.038330901
Range 4.079999908
Minimum -2.010083353
Maximum 2.069916555
Sum -1.62739753
Count 21
Confidence Level
(95.0%) 0.461833013
Column1 REAL GDP GROWTH RATE OF USA

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Mean -0.183529247
Standard Error 0.378251666
Median -0.238821158
Mode #N/A
Standard Deviation 1.774157575
Sample Variance 3.1476351
Kurtosis 3.477356076
Skewness 1.019380258
Range 8.423644805
Minimum -3.116194615
Maximum 5.30745019
Sum -4.037643425
Count 22
Confidence Level
(95.0%) 0.786617401
Pair wise graphs of macroeconomic indicators
Figure 1Relationship between real GDP and inflation

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1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
0
1
2
3
4
5
6
AUSTRALIA
INFLATION REAL GDP
YEAR
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-1
0
1
2
3
4
5
-4
-3
-2
-1
0
1
2
3
4
5
6
USA
INFLATION REAL GDP
YEAR
The table above shows the summary statistics of the real gross domestic growth rate of
United States of America and Australia. As the table shows that the value of the standard
deviation is greater than mean, the value is positively skewed in nature. The graph of the
United states of America shows the relation between inflation and real gross domestic
product. It shows that when the gross domestic product rises, the inflation rate also rises and
when it declines the other variable also declines. The maximum growth of real GDP in case
of USA was 5 percent and the minimum were. on the other hand, the maximum growth of
real GDP of Australia was 2 and the minimum was -2. The graph showing the growth of real

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GDP and inflation growth in Australia shows that they fluctuate a lot. The rate of inflation
was minimum in the year 1997 and for USA the inflation was lowest in the year 2009.
Rate of inflation of Australia and USA: summary statistics
Column1 INFLATION RATE USA
Mean 2.265611
Standard Error 0.229945
Median 2.33769
Mode #N/A
Standard Deviation 1.05374
Sample Variance 1.110369
Kurtosis 0.925325
Skewness -0.96449
Range 4.194647
Minimum -0.35555
Maximum 3.8391
Sum 47.57783
Count 21
Confidence Level (95.0%) 0.479657
Column1 INFLATION RATE OF AUSTRALIA
Mean 2.660028
Standard Error 0.258969
Median 2.615385
Mode #N/A
Standard Deviation 1.186744
Sample Variance 1.408362

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Kurtosis -0.29508
Skewness -0.01036
Range 4.402879
Minimum 0.224888
Maximum 4.627767
Sum 55.86059
Count 21
Confidence Level
(95.0%) 0.540199
Rate on
Unemployment in
Australia and USA:
summary statistics
Column1
UNEMPLOYME
NT RATE OF
AUSTRALIA
Mean 6.089523792

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Standard Error 0.280750247
Median 5.929999828
Mode #N/A
Standard Deviation 1.286559258
Sample Variance 1.655234724
Kurtosis -0.372278321
Skewness 0.684467226
Range 4.28000021
Minimum 4.230000019
Maximum 8.510000229
Sum 127.8799996
Count 21
Confidence Level (95.0%) 0.585634753
Column1 UNEMPLOYMENT RATE OF USA
Mean 5.977142868
Standard Error 0.367830277
Median 5.53000021
Mode 5.78000021
Standard Deviation 1.685610087
Sample Variance 2.841281364
Kurtosis 0.131848224
Skewness 1.109018864
Range 5.640000105

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Minimum 3.99000001
Maximum 9.630000114
Sum 125.5200002
Count 21
Confidence Level
(95.0%) 0.767280512
Figure 2 Relationship between real GDP and unemployment
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
1
2
3
4
5
6
7
8
9
0
1
2
3
4
5
6
AUSTRALIA
Series1 REAL GDP
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
2
4
6
8
10
12
-4
-3
-2
-1
0
1
2
3
4
5
6
USA
UNEMPLOYMENTS REAL GDP

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The above summary statistics shows the values for both USA and Australia. Both the values
are being positively skewed for both the countries. The graph above shows the relationship
between the real gross domestic product and rate of unemployment. The gross domestic was
product was minimum in the year 2009 for USA and for Australia it was minimum in the
year 2001. The values of real gross domestic product fluctuated a lot unlike the values for
unemployment.
Net exports for USA and Australia: summary statistics
Column1 NX OF AUSTRALIA
Mean -1.166077721
Standard Error 0.244954835
Median -1.298144186
Mode #N/A
Standard Deviation 1.122524075
Sample Variance 1.260060298
Kurtosis -1.170943089
Skewness 0.203812415
Range 3.711753595
Minimum -2.744010975
Maximum 0.96774262
Sum -24.48763215
Count 21
Confidence Level (95.0%) 0.510966833
Column1 NX OF AUSTRALIA
Mean -1.166077721
Standard Error 0.244954835
Median -1.298144186
Mode #N/A
Standard Deviation 1.122524075
Sample Variance 1.260060298

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Kurtosis -1.170943089
Skewness 0.203812415
Range 3.711753595
Minimum -2.744010975
Maximum 0.96774262
Sum -24.48763215
Count 21
Confidence Level (95.0%) 0.510966833
The value above shows the summary statistics for Australia as well as for united states of
America. The value of the net exports remained negative for both the countries since imports
had been more than exports. For most of the time the countries known to have imported large
amount of goods than exports.
Interest rate for Australia and USA.: summary statistics
Column1
CASH RATE FOR
AUSTRALIA
Mean 4.738095
Standard Error 0.313618
Median 4.75
Mode 4.75
Standard Deviation 1.437176
Sample Variance 2.065476
Kurtosis -0.26819
Skewness -0.19797
Range 5.5
Minimum 2
Maximum 7.5
Sum 99.5
Count 21
Confidence Level
(95.0%) 0.654195
Column1 INTERES
T RATE

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OF USA
Mean 2.559524
Standard Error 0.52638
Median 1.82
Mode 0.16
Standard Deviation 2.412176
Sample Variance 5.818595
Kurtosis -1.79413
Skewness 0.271431
Range 6.33
Minimum 0.07
Maximum 6.4
Sum 53.75
Count 21
Confidence Level
(95.0%) 1.09801
Figure 3Relationship between real GDP and interest rate
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
1
2
3
4
5
6
7
8
AUSTRALIA
REAL GDP INTEREST RATE

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1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-4
-2
0
2
4
6
8
USA
REAL GDP INTEREST RATE
The graph above shows the relationship between the cash rate of Australia and the growth
rate of real GDP. The second graph shows the relationship between the real gross domestic
product and the rate of interest of USA. The value of the interest rate went down and was
stable from 2009 onwards in case of United States of America. On the other hand, the cash
rate had been the highest 2006 and 2007 in case of Australia.
negative kurtosis
Exchange rate of Australia and USA.: summary statistics
Column1
Exchange rate
OF AUSTRALIA
Mean 0.770531
Standard Error 0.009618
Median 0.7615
Mode 0.7389
Standard Deviation 0.15237
Sample Variance 0.023217
Kurtosis -0.70266
Skewness 0.211558
Range 0.6064
Minimum 0.489

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Maximum 1.0954
Sum 193.4033
Count 251
Confidence Level
(95.0%) 0.018942
Column1 EXCHANGE RATE OF USA
Mean 1.350850517
Standard Error 0.017442062
Median 1.313197636
Mode 1.353363107
Standard Deviation 0.276334229
Sample Variance 0.076360606
Kurtosis -0.335258987
Skewness 0.564650156
Range 1.132081248
Minimum 0.912908527
Maximum 2.044989775

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Sum 339.0634799
Count 251
Confidence Level (95.0%) 0.034352113

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Figure 4 Relationship between real GDP and exchange rate
-4
-3
-2
-1
0
1
2
3
4
5
6
0
0.5
1
1.5
2
2.5
USA
REAL GDP EXCHANGE RATE
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0
1
2
3
4
5
6
0.0000
0.2000
0.4000
0.6000
0.8000
1.0000
1.2000
AUSTRALIA
REAL GDP EXCHANGE RATE
The graph above shows that the value of the exchange rate had fluctuated a lot. The value of
the mean of the exchange rate for the united states was one the value of mode was similar to
that which suggests that exchange rate was one for most of the time. The value of the
standard deviation is also less than one with negative kurtosis. The exchange rate of Australia

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shows that it will be having negative kurtosis and positive skewness with the value of mean
less than one.
Role of government’s monetary and fiscal polices
The policies of the government which influences the growth of the economy are
number one the monetary policy and number two the fiscal policies. For the monetary
policies when there will be a change in the rate of interest, at that point of time the rates will
be affecting the money supply. For increasing the spending in the economy by encouraging
the economic growth, the government is known to lose the rate of interest. The government
will be lowering the rate of interest for the rise in the money supply which can also lead to
inflation. In case when the economy is growing it can result to huge amount of inflation.
Although low supply of money automatically discourages spending. In order to determine the
monetary policy one of the main duties of the Reserve Bank of Australia is to maintain price
stability and full employment. The Reserve Bank of Australia also will be achieving the
inflation target and keeping the inflation around 2 to 3 percent on average. For Australia, the
monetary policy is mostly about setting the official rate of interest for the nation. The interest
rate in Australia is mostly said to be the cash rate. The cash rate will be affecting the rate of
interest in the economy which will also influence the microeconomic variables of the
economy. one of the main aims of the monetary policy of Australia is stabilizing the
Australian currency along with maintenance of full employment. The welfare and economic
prosperity of Australia are also maintained through this. Although the various tools of the
monetary policy usually comprise of the open market operations, reserve requirements and
the discount rate. The central bank of America which is also the Federal Reserves states that
the monetary policy will be affecting the amount of money and credit in American economy.

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The fiscal policies are known as the spending by the government along with the various other
tax policies that will influence the macroeconomic conditions that will be including inflation
rate, economic growth aggregate demand and employment. The objectives of the fiscal policy
are supplying the public goods which contributes to the betterment of the population. This is
also known to stabilize the cyclical fluctuations in the economy. Therefore, it can be stated
that the budget is one of the main tools in order to achieve this objective and for this reason
fiscal policy will be one of the main tools. In United States of America, the fiscal policy is
known to be directed by the legislative and the executive branches. For executive branches
the president decides the main instruments. The government in the united states need to spend
a lot of money for affecting the growth. At one particular period of time the national debt is
known to be more than $1 billion. For Australia, the monetary policy is mostly about setting
the official rate of interest for the nation. The interest rate in case if Australia is mostly said to
be the cash rate. The cash rate will be affecting the rate of interest in the economy which will
also influence the microeconomic variables of the economy. one of the main aims of the
monetary policy of Australia is stabilizing the Australian currency along with maintenance of
full employment. The welfare and economic prosperity of Australia are also minted through
this. Although the monetary policy of the United states of America comprises of the various
actions of the Federal Reserves and communications. The fiscal policy instruments are quite
effective for poverty reduction and also for promoting the living standards of community.
The fiscal policies are mainly used for stabilization of the economy over the course of the
business cycle. In case of any kind of variation in the tax composition of the government, it
will be affecting the macroeconomic distributions like those of savings, income distributions
and the various level of the economic activity which the aggregate demand shows. There is
presence of three different types of fiscal policies those are the neutral fiscal policy,
contractionary fiscal policy and the expansionary fiscal policy. On the other hand, monetary

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polices can also be contractionary in nature or expansionary. When the contractionary fiscal
policies take place the deficit spending of the government are known to lower than usual.
Although, in cases when the government spending will be above the tax revenue there will be
result of expansionary fiscal policy. The neutral fiscal policy is known to take place will there
be absence of any kind of boom or recession.
Macroeconomy of Australia
The graphs above shows that there is a presence of inverse relationship between the
growth of the gross domestic product and the inflation rate for the first few years. The data
which have been collected from world bank shows that rate of inflation have decreased from
the year 1995 for the four years, however, it again started increasing. The rate of inflation in
case of the United States of America were known to be around 2 to 3 percent in case of most
of the years. However, in 2009, the value went to negative. The value of the real gross
domestic product was known to be three to four percent all over the years. On the other hand,
it went down in the year 2008. The summary statistics which had been found in the table
above shows in case of the unemployment rate, it was found to be eight percent back in the
year of 1995. It started to decline and reached the lowest in the year 2008 where the rate of
unemployment reached the lowest. For the net exports and the value of the net imports the
websites of the world bank shows that the imports are known to be higher while comparing
with the exports. The exports are known to be quite high in 2009. The imports are known to
be high also in 2001. The value of the net exports is negative all throughout the year.
Although in the year 2009 and in 2001, the exports have been higher than the imports. The
Australian economy have been experiencing a favourite global conditions where there will be
presence of strong domestic demand when there will be growth in the population. The
presence of the global uncertainty along with huge debt can also weaken the prospect of the
growth. The recent growth of the economy is known to be driven by the household

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consumption along with the government spending. The continuous growth of the population
had made the government to increase their spending on transport along with the various other
infrastructures in case of New South Wales and also for places like Victoria. There will be
tightening of the monetary policies which will be affecting the global market of China. China
is also known to one of the trading partners in Australia. The growth of the output is known
to be moderate in nature in the coming years as the capacity constraints can be tightening
which can lead to slow growth in the market of exports. The households will also not be
willing to draw down savings in general. When the summary statistics of the cash rate in case
of Australia and the interest rate in case of the United States of America had been found, it
showed that there will be presence of negative kurtosis. The maximum amount of the cash
rate is known to be more than seven percent and that of the minimum was at 2 percent. In
case of measurement the American interest rate was known to be quite low. The standards
error was known to be at 0.5 and the value of the variance had been at six percent. Where the
value of median and mode was around one. The value of the standard deviation had been also
found to be one in case of mean and median. The value of the variance was very low around
0.2 where the maximum rate of exchange was one and the minimum was found to be zero. As
the value of the standard error had been found to be at 0.5 the cash rate of Australia is found
to be higher than the rate of interest of the United States.
Conclusion
The monetary policy of the United states of America comprises of the various actions of the
Federal Reserves and communications. It will also help to promote the maximum
employment, long term interest rate and stable prices. There are various goals in the
economy that are instructed by the congress to the Federal Reserves which are generally
followed. The Australian economy will also be experiencing tighter financing conditions

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along with sluggish growth which will be squeezing the consumers spending. Therefore in
the coming years, there will be a huge growth in the Australian economy.
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