Econ data analysis project
saizo0816
NationalEconomyFall18.pptx
The
National Economy
National Economy Issues
GDP
Calculated by the Bureau of Economic Analysis (BEA)
Measures production of final goods and services each quarter.
C + I + G + NX
Revisions (Advanced, Second, and Third)
Only 50% of data is available on advanced report: uses extrapolation to complete data set.
Adjusts for Inflation: Chained vs. Nominal GDP
Does not measure the underground Economy
Can we measure such? Research methodology:
Surveys
Compare national expenditures in excess of national income.
Compare employed people exceeding the number of jobs in the economy.
Compare electricity usage in excess of that required for reported production.
Analyze money supply usage in excess of that required for reported production.
National Economy Issues
Genuine Progress Indicator (GPI)
GDP does not make any subjective evaluations regarding the virtue or aesthetic qualities of production.
GDP measures value based on market prices only.
GPI Corrects GDP for environmental degradation, inequality, crime, loss of leisure time, public infrastructure, volunteer activities, and housework.
International Comparisons
When making international comparisons PPP adjusts currency values for the amount of goods a given unit of currency can buy.
Absent PPP adjustments China is ≈ 62% the size of the U.S (IMF 2017).
With PPP adjustments China is ≈ 120% the size of the U.S. (IMF 2017).
For China, working backwards with growth rates, 1952 per capita income in China would have been $279, an unsustainably low figure.
Better gauge of standard of living than overall GDP.
National Economy Issues
International Statistics
IMF Direction of Trade Statistics
High monthly volatility in export and import data.
Irreconcilable data sets
Global imports do not equal global exports.
Globalization
Sales data often inaccurately reflects where production takes place.
Assembling and sales often occur in different regions.
Labor Productivity
Typically measured as: output/labor hours
Problem: how to measure labor hours and output.
At-home work may overestimate productivity.
“inside the box” effect: inaccurately estimating quality changes in productivity.
Services are particularly difficult to quantify.
National Economy Issues
Consumer Confidence
Leading indicator since economy weighted largely in consumer expenditures.
Savings Rates
Why is it important:
Saving → Investment → Capital Formation → Economic Growth
Personal Savings is not the only type of savings (e.g. business retained earnings and foreign savings)
Some economists believe a genuine savings rate” should measure actual investment which would be closer to 20% of GDP.
Including durable consumption goods would take it to over 25%
