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“Note: Mental Models Are Deeply In-Grained Assumptions, Generalizations, or Even Pictures of Images That Influence How We Understand the World and How We Take Action,” 5th Discipline, Double Day, New York, London, Toronto, Sydney, Auckland, 1990, 2006.

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• TITLE: GDP Falls as MBA Rises?

  AUTHORS: T. N. Cummins

  KEYWORDS: Economic Growth; GDP; Correlation Coefficient; Quasi-Experimental Design; Economic Policy; Chow Test; Management; Mental Models; Business History; National Security; Public Goods; MBA; Structural Change

  JOURNAL NAME: Applied Mathematics, Vol.4 No.10, October 14, 2013

  ABSTRACT: By charting US GDP growth rates beginning from 1953 through the Bush administration of 2008, an inverted “V” pattern appears with 1980 as an approximate pivot point. The observable upward trend of the US economy after WWII and before 1980 coincides with more active public domestic budgets when compared with budgets after 1980. Political discourse in the late 20th century suggests an economic policy shift away from public investments toward private sector interests which may have contributed to structural changes in the US economy. After charting preand post-1980 US quarterly GDP data, a fifty-six-year naturally occurring quasi-experimental design [1] displays two periods of different economic outcomes. By exploring a plausible contributor to the change in economic trend data using applied math, concerned parties may begin to map out the unknown unknowns of economic performance. This paper uses the best linear unbiased estimator of Gauss and Markov to quantify economic rates of growth in each period. Pearson’s correlation coefficient attempts to characterize mathematically the impact of systemic political change on US economic performance. Finally, a Chow test confirms structural change is afoot. With the help of statistical analysis, this paper explores if the increase in US business majors since 1980 has or has not delivered ever improving US GDP growth from 1980-2008. This work is important as the economic health of a nation over the long run allows nations to protect and provide for their citizens.