In the plotting the Real GDP per capita data, individual series has been chosen. This is because it is important to understand each value of real GDP per capita for each particular year, and hence, individual series have considered all the units separately for each year. The alternative series that could have plotted would be the frequency series in which the data would be grouped and frequencies of each group would be plotted. The frequency series would be not applicable for plotting the real GDP per capita series, because the value of real GDP per capita changes over time and that contains continuous values that cannot be grouped and assigned frequency (Parkin, 2014).
The real output per capita in New Zealand diverged from Australia from the year 1990. Australians are considered to be richer than New Zealanders, which is reflected in the real GDP per capita as it can be seen from the graph above. This divergence is confusing given that both the countries enjoyed a similar level of income. Yetpost-1970s, both the countries started facing economic shocks, bad policy, ineffective reforms, recession etc. while Australia was able to recover from the period, and New Zealand was quite lagging behind. The resource boom that occurred in the 1990s had a great impact on the economy of Australia. Economists suggest that the resource boom is overrated and that the New Zealand’s commodities experienced record returns. In spite of exports being the greater proportion of GDP in New Zealand as compared to that Australia, it could not really guarantee the growth in New Zealand. So even if both the countries started their economic journey from the same income level, it is Australia that took the pace and went ahead .