I am using R-Studio to plot productivity (TFP) growth in the German manufacturing sector over time, however, I am not sure if I do it correctly, because in one subsector, the graph shows high volatility.
The picture shows my graph. I am using this code:
growthaccounts1_graph<- growthaccounts1 %>%
filter(year >2000)
ggplot(data = growthaccounts1_graph, aes(x = year, y = TFP_growth_rate, color = nace_r2_name)) +
geom_line() +
theme_minimal() +
labs(title = "TFP in the Manufacturing Sector over Time",
x = "Year",
y = "TFP index, 2015=100.",
color = "Manufacturing (sub)sector",
caption = "Data: EU KLEMS"
)
and I calculated my growth rates like this:
growthaccounts1 <- growthaccounts1 %>%
group_by(IND) %>%
arrange(year) %>%
mutate(TFP_growth_rate = ((VATFP_I - lag(VATFP_I)) / lag(VATFP_I))*100) %>%
ungroup()
VATFP_I is the value-added growth rate of TFP with 2015=100
IND clusters the manufacturing sector by subindustries
year is the time period: 2001-2019
Am I doing something wrong? Or could these fluctuations be “normal”? I want to use this image in my Summary Statistics section, where I present the growth rate of TFP. Is it better here to plot TFP in log? initially, I wanted to plot TFP in percentage yearly changes (as seen in the graph) because of the better interpretation.
I am thanking you in advance!