Quantitative Methods for Economic Analysis

QUANTITATIVE METHODS FOR ECONOMIC ANALYSIS 1
Quantitative Methods for Economic Analysis
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The City and State
The Date

QUANTITATIVE METHODS FOR ECONOMIC ANALYSIS 2
Introduction
The article selected for this analysis paper is "Australia's Economy just entered Recession on a
per capita basis," by Letts Stephen. It was published on the 6th March 2019 in ABC News. The
article is about the state of Australia's economic performance in the third and fourth quarter of
2018, where the economy declined by 0.2 percent. The Reserve Bank of Australia had projected
the economy to grow by 2.8 percent, but because of how the economy performed in the 3rd and
4th, the overall annual performance was 2.3 below that which was forecasted (Stephen, 2019).
The above can be seen in the graph below.
Figure 1: Agraph showing GDP per capita
Source: (Stephen, 2019)

QUANTITATIVE METHODS FOR ECONOMIC ANALYSIS 3
The slow economic growth was due to the reduced per- capita income reflected in the low
household expenditure and decreased investment by the dwelling. Consumers are spending more
than they are earned and that their expenses are growing more than their incomes. Per- capita
income is calculated by getting the quotient of the national income and the country's population.
And the above can be illustrated in the graph below.
Figure 2: A graph showing household incomes vs. the savings
Source: (Stephen, 2019)
The above value shows or measures the living standards of the people of a given country. On the
other hand, GDP is the measure of the final total value of goods and services that have been
produced within the borders of a country in a specified time, usually quarterly, yearly. GDP
figures are usually used to measure the economic activity of a country, while GDP per- capita is
GDP divided by the country's population. It measures a country's standards of living (Williams et