Chapter 6 Tables
We now want to calculate the trend growth rate of UK GDP per capita between 1950 and 2019 using our data from the Penn World Tables. In addition to the trend growth over the full sample period, we would like to calculate it over three subperiods that we have identified using the plot of the logarithm of GDP per capita: 1950-1990, 1990-2008 and 2008-2019. Finally we would like to present the results in a table in a Word document.
6.1 Calculate compound growth rates in Excel
To calculate the compound average growth rate between time \(t\) and time \(s\), we use the compound growth rate formula: \(g_{y,t-s} = \left(\frac{y_{s}}{y_{t}}\right)^{\frac{1}{s-t}}-1\) (multiplied by 100 to express the growth rate in %).
Alternatively you may use the formula using the logarithmic approximation to calculate compound annual growth rates: \(g_{y,t-s} = \frac{1}{s-t}(\ln{y_s}-\ln{y_t})\) (multiplied by 100 to express the growth rate in %).