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Choosing Penn World Data Variables
You need to distinguish which data series are likely to be most helpful to you. Some of the Penn World Data are more interesting and useful than others. If you start by printing out the description of the variables you will have a numbered list of the data series available. Those which are most often likely to be of interest are items 1 - 6, 12 - 18 and 21 - 23.
For some data, there are several very similar variables but not all of them will be equally informative. For example, if you want to look at real GDP per capita, you would do best to choose GDP per capita in constant dollars (15 and 16), but not Real GDP per capita (current prices) (3), because that will not be indexed or adjusted for domestic inflation. Price level (GDP) (7) is a measure of inflation, but you will find that sometimes prices seem to have gone down. This is because all price levels have been converted into US dollars. So when, say, Australia experiences a falling exchange rate, its product prices in US dollars appear to have fallen. You can see this problem quite clearly if you access the 'Price level GDP' and 'Exchange rate' series for Australia. In reality, Australia has experienced similar inflation rates to the UK over the years.
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