ASSIGNMENT 1

Introduction to Statistics

Submitted byPGPBF 2013 15

1) Research Domain: Global Economy Author: Martin Wolf Publication: Financial Times,3 July 2) Topic: Risks of a hard landing for China 3) Research question: Challenges which the Chinese government will face with a slowing economy and to draw out an analogy using macroeconomic parameters : What all could happen if Chinese step forward to bring a 10 percent growth down to a one with 6 percent ? 4) Population/sample data: Data across years comprising of Credit by institutions, GDP of Chinese economy and current domestic debt across nations has been plotted in order to derive an intuitive cause-effect relationship among three different parameters and infer how different market mechanisms when applied could lead into a fall.

5) Descriptive/inferential statistics: The given information is represented numerically and graphically to give both quantitative and visual understanding of the data and hence it is descriptive statistics. 6) Elements: Elements comprises of Credit provided by Chinese financial institutions, GDP of China , and Public Debt of Nations .

7) Variable: The first three graph uses time series data and as the data is mainly collected across a period from 2009 to 2013 that comprises of the variables in the data set. The last plot uses a cross sectional data set with ratio scale of measurement to plot the current percentage of private debt . 8) Continuous / Discrete data: Each of the data set is Continuous as the data is being measured and not counted.
2

9) Chart type: The first three pictorial representation are histogram while the last one is a bar chart as the arrangement among various countries is irrelevant. 10) Inferences derived from the Data set:

Fig 2 shows Chinese GDP growth rate across years and puts in various contributing components which fuelled it. It takes GDP as input and this time series data is converted into a % annual growth rate. After 2008, Exports ceased to be the driving force for the Chinese economy. So, Contribution of Investments in GDP took a jump from 42% to 48% in an years period. Fig 1 is graph of the time series which uses credit provided across years as input to calculate annual percentage change in loans. It helps to clearly figure out how in 2009 loans rose at an annual rate of close to 30 percent. So the cumulative effect of all three was that as the % of investment contribution to GDP increased with falling exports and explosion of credit happened it led to an increase in investments and fall in Consumption. After explaining these conditions , Martin Wolf picks up the real challenges. He states As the inventories are growing with an annual rate of 10 percent so in order to have an economy growing at 6 percent would need 60 percent of investment in inventories growing at 10 percent.