lecture 2 the data of macroeconomics, macroeconomic accounts 1 1.measuring the value of economic...
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Lecture 2The Data of Macroeconomics,Macroeconomic Accounts
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1. Measuring the Value of Economic Activity: GDP
2. Measuring the Cost of Living: The CPI
3. Measuring Joblessness: The Unemployment rate
Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Why GDP is important?
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
Flow variables: GDP, income, expenditure, # of people losing their jobs, budget deficit
Stock: variables: wealth, # of unemployed people, government debt, international reserves
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
Rules for Computing GDP
• The treatment of inventories
• Adding different types of goods
• Used goods
• Intermediate goods and value added
• Imputation
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
Real and nominal GDP
The GDP deflator
Chain-weighted measures of real GDP
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Euro area: annual rates of growth
Nominal GDP Real GDP GDP deflator
1997 2.2 2.6 -0.41998 3.9 2.9 1.01999 4.6 3.1 1.52000 5.2 4.0 1.32001 4.3 2.0 2.42002 3.5 0.9 2.62003 2.9 0.8 2.12004 4.0 2.1 1.92005 3.4 1.5 1.92006 4.6 2.8 1.8
Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
The Components of Expenditure
Y = C + I + G + NX
• Output i.e. GDP (Y)
• Consumption (C)
• Investment (I)
• Government purchases (G)
• Net exports (NX)
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
Components of GDP(1999-2006, % of GDP)
Consumption (C) Investment (I) Government
purchases (G)
Australia 58.3 25.2 18.1Germany 58.9 18.6 19.0France 56.3 19.8 23.4UK 64.7 17.7 20.5
Italy 59.2 20.7 19.5Japan 57.0 24.0 17.6Canada 56.0 20.6 19.2Switzerland 60.3 22.0 11.5
USA 69.7 19.5 15.4Euro Area 57.1 20.9 20.3
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Personal disposable
income
Personal incomeNational
income
NDPGDP
C
Indirect taxes
Depreciation
I
G
X-Z
GDP and Its Components
Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Other Measures of Income
Gross National Product
Net National Product
National Income
Personal Income
Disposable Personal Income
Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
Inflation
The Consumer Price Index
The GDP Deflator
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
The Unemployment Rate
• Employed
• Unemployed
• Labor Force
• Unemployment Rate
• Labor Force Participation Rate
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
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Lecture 2 The Data of MacroeconomicsMacroeconomic Accounts
From Economic Statistics to Economic Models