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Long-run Economic Growth & ConvergenceUse the dataset provided in the Moodle for this question. The data depicts the GDP per capita ofdifferent countries for the selected years of 1970, 1985 and 2007.
Long-run Economic Growth & ConvergenceUse the dataset provided in the Moodle for this question. The data depicts the GDP per capita ofdifferent countries for the selected years of 1970, 1985 and 2007. You can use any data analysisprograming language that you are convenient with for this term paper. You can also use theprograming language which we used in the class, Gretl, accessible for free download athttp://gretl.sourceforge.net .1. Introduction● Discuss Long Run Economic Growth● Will the poor countries catch up rich countries by growing faster?● Identify between conditional and unconditional convergence2. BackgroundSelect 6 sample countries from the data (3 poor and 3 rich) and explain what important keyhistoric or economic factors have happened during the years under consideration and how is thisreflected in their per capita GDP? Make an economic analysis of the characteristics of thesecountries under consideration.3. Data Analysis● Using data of GDP per capita provided in the dataset, plot histograms of GDP for all the threeyears and describe how the distribution of income evolves. If there are any outliers, omit them.In a case where you encounter any outlier, then provide economic intuition for evaluating thesecountries as outliers.● Calculate the Growth rate of GDP per capita for each of the countries in the years underconsideration. Show boxplots of incomes for all the countries in each year. What happened? Isthere any evidence for convergence? Discuss the notions of conditional and unconditionalconvergence in this regard (Hint.: Use logs instead of levels).● Split the data into two groups of poor and rich. The split should be done according to themedian income in 1975. Then show boxplots of incomes for both groups in each year. Whathappened? Is there any evidence for convergence? (Hint.: Use logs instead of levels. Start withsplitting the sample: poor in 1975, 1985 and 2007, then same for the rich. Plot boxplots foreach).4. Explanation of Economic growth and ConvergenceExplain the structure of the data provided and how it characterises the countries underconsideration over the years that are taken into account. Using your own words, explain why youbelieve that the poor countries in the data can (cannot) catch up the rich countries? Your argumentshould be based on the convergence analysis you made from the data. You can support yourargument by citing relevant works that are in line with your analysis.5. ConclusionIn summing up your analysis; provide a summary of the main points in your paper in connectionwith the theory of long run economic growth and convergence.The general content and flow of the paper should follow:1. Introduction2. Background3. Data Analysis4. Explanation of Economic growth and Convergence5. Conclusion6. References