Team info

  • Group name: Beach Bums
  • Group members: Emily Minus, Conrad Kuklinsky

Purpose

We are analyzing the relationship between the debt to GDP ratio and the imports to exports ratio for five countries. In general, the debt to GDP ratio tends to go up during times of economic hardship when countries borrow to boost a depressed economy. Governments also tend to borrow a lot to finance wars, so that might be another reason for the ratio to increase. The imports to exports ratio is dependent on a mostly different set of factors. It mainly depends on interest rate and the value of the domestic currency. Greater value of domestic currency tends to result in a greater imports to exports ratio. It is possible that there is little or no relationship between our two ratios.

Our outcome variable is debt to GDP ratio. Our numerical explanatory variables are year and trade ratio, and our categorical explanatory variable is country. We obtained all of our data from the IMF (International Monetary Fund) website:

http://data.imf.org/?sk=388DFA60-1D26-4ADE-B505-A05A558D9A42&sId=1479329132316

To create our dataset, we utilized the Historical Public Debt and Direction of Trade Statistics datasets from the International Monetary Fund. Using the site’s Query function, we selected for five countries —Australia, Canada, Mexico, Paraguay, and Peru— and then selected economic factors. While debt to GDP ratio was a factor in the Historical Public Debt dataset, to create the import to export ratio variable we had to select to separate factors from the Direction of Trade Statistics – value of export goods in US dollars and value of import goods in US dollars – and express them as one variable, trade ratio.

Load packages and data

country year debt_to_gdp trade_ratio
Australia 1966 41.23164 1.0225588
Australia 1967 39.24582 1.0032633
Australia 1968 38.21143 1.1108776
Australia 1969 35.72693 0.9611279
Australia 1970 33.90505 0.9494408
Australia 1971 31.32648 0.8942754

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