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Re: st: growth rate


From   Christopher Baum <kit.baum@bc.edu>
To   "statalist@hsphsun2.harvard.edu" <statalist@hsphsun2.harvard.edu>
Subject   Re: st: growth rate
Date   Thu, 11 Oct 2012 10:47:28 +0000

<>
On Oct 11, 2012, at 2:33 AM,Justina wrote:

> what I would do is match the data set with complete GDP data from the WDI  (World Bank), filling the gaps w.r.t. years and GDP.
> 
> with this resulting panel without gaps it is then possible to calculate all one-year and x-year (compound) growth rates needed.

As Justina suggests, even if you have complete annual data, a n-year growth rate is not the arithmetic mean of n individual growth rates. It is the geometric average of those growth rates, as many have found to their dismay when viewing their portfolio statements in the last few years.

Not specifically applicable to the original problem posed, but my -tscollap- routine, a 'smarter' version of collapse for time series data, has an option to produce geometric means rather than sums or averages. You can find it on SSC.

Kit


Kit Baum   |   Boston College Economics & DIW Berlin   |   http://ideas.repec.org/e/pba1.html
                             An Introduction to Stata Programming  |   http://www.stata-press.com/books/isp.html
  An Introduction to Modern Econometrics Using Stata  |   http://www.stata-press.com/books/imeus.html


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