Assistant Professor, Delhi School of Economics, Delhi University, India-110007
Online published on 30 December, 2015.
This paper examines the importance of various country-wide variables in explaining fluctuations in US GDP for the time period 1990–2005. We use single equation multivariate method to find out relevant explanatory variables. Real exports, real government expenditure, real rate of interest, lagged gross domestic product and lagged money stock are found to be significant in explaining fluctuations in US GDP. We have checked for serial correlation and heteroskedasticity and corrected for them. Model fits the data quite well and forecasts are most accurate for long time horizon.
explanatory variables, multivariate method, single equation, US gross domestic product
