Changes in GDP over time
estimate of GDP = 2562.6 − 74.913 t + 2.0851 t2
estimate of ln (GDP) = 7.851 + 0.03166 t
These two equations are the least squares fits of a quadratic model and a model using a transformed response. Use the pop-up menu to display them on the scatterplot and note that they fit the data equally well.
Use the slider to expand the scale and see the implications of both models. Explain that we have no idea of what the shape of the model should be beyond the data — it could be different from either of these models.
Avoid extrapolation.
This data set shows how GDP has increased in the USA since 1960. The GDP has been measured in billion US dollars, corrected for inflation by expressing it in terms of 1996 dollars.