Finding Aggregate Growth Rate Using Regression Technique

Abstract

In this chapter we attempt to find the overall growth rate either from the original set of observations or from the growth rate of each component. The focus of the chapter is to find the aggregate growth rate from the individual growth rates. We have also discussed how the calculation of growth rates can be done using regression technique. Moreover, the formula can compute average growth rate even when there are some zero or negative growth rate. The treatments of cross section data and the time series data are usually quite different. The present chapter unifies the methods in such a way that the formula can be applied both in cross section and time series data. The modified growth rate happens to be an intermediate growth rate, because it lies between geometric and arithmetic mean when all the individual growth rates are positive.