Questions tagged [economic-growth]

An increase over time in the quantity of goods and services produced within an economy.

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1answer
16 views

Difference between Luxury/Premium/Value fashion segments? What does “value” mean here?

I was reading this article on Quartz: https://qz.com/1485141/just-20-fashion-companies-are-making-almost-all-of-the-industrys-profits/ I do not understand the following graph shown: What does "value"...
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Does the US Bureau of Economic Analysis use the generic growth formula to calculate percent change of GDP?

My question is so basic, I'm embarrassed to ask it. (I study computational theory, not economics.) I'm looking at quarterly GDP numbers and growth rates. I've tried to arrive at the BEA's CPGDPAI ...
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19 views

FDI - Foreign Direct Investment

If in the sector foreign direct investments (FDI) are not stable, for instance, increasing dramatically in one year, decreasing next year. fluctuation continues over ten years, what FDI can say about ...
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How can autonomous private spending change budget surplus?

I was reading Keynesian economics in R.Dornbusch's book where he mentioned the defects of using budget surplus as a measure where he says it can be changed and effected by autonomous private spending ...
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Why economy has cycles? [closed]

If the economy growth, why it does it cyclically instead of linearly? I am looking for an intuitive explanation because the web is full of technical ones.
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Which model gives a more accurate representation of growth?

Does the Solow model or the combined Romer - Solow model give a more accurate representation of growth?
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Interaction between productivity growth and interest rates

Isabel Schnabel, Member of the Executive Board of the European Central Bank point at the interview out "The real interest rate (...) emerges from the economy’s growth potential in the long run.“ https:...
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Equilibrium in currency devaluation?

In export oriented Economy, we often come across currency devaluation as means to boost exports. As per my understanding (please correct me if I am wrong), currency devaluation will immediately bring ...
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Are there economic models that predict (only) a medium/long-term negative effect of protectionism?

Going by some ECB models/estimates from last year, protectionism would result in negative consequences pretty fast, e.g. For illustration, I will use the results of simulations carried out by ECB ...
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Does migration exacerbate (albeit delay) the problem of aging, economically-inactive populations in Western societies?

As a layman, I've always understood that there is a general consensus amongst economists that "immigration is economically beneficial" to rich Western countries (like Britain) who have aging ...
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Macroeconomics for Mathematicians

I'm coming from a math background (so my mind is set up for Definitions-Observation-Lemma-Proof frameworks) and looking for recommendations of a Macroeconomics textbook mainly devoted to growth models ...
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Country specific economic recession/financial crisis data?

Many financial crises are at the global level, yet some of them can be country-specific, especially the ones connected with political instability. For example, the 1990 recession of Russia, the 1958 ...
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Understanding GDP vs Real GDP

I am totally new to Economics. I have issues understanding GDP and real GDP. I have listed 3 statements below, can someone tell me if those makes sense ? GDP Gross Domestic Product is used to get an ...
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When does increasing government spending lead to economic growth and when does it lead to stagflation?

Obviously increasing government spending endlessly will lead to inflation. What I ask is: when can an increase in government spending, when the economy is in a recession, lead to economic growth ...
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What is the upper limit of circulating money on earth?

I've come up with this question while discussing the topic of customer-perceived value with coworker. Is there a theoretical upper limit to all circulating money in this world? To avoid inflation ...
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Regarding global economic slow down

I heard in news that world is going through,the economic slow doing may be because of us China trade war or any other reason. and India is one of the country which affected by this slowdown, but ...
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Steady state growth of output

In the long run Solow steady state, the growth rate of output in a country is g + n. If there is some other country with exactly the same properties of the first country and the same initial ...
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Patterns for Gross national income (GDP) measurement, from deals within the borders of a state

I desire to learn patterns for Gross national income (GDP) measurement, from deals within the borders of a state. I understand that only the following patterns are possible for GDP growth measurement ...
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Would a zero-growth economy with zero-growth population still have the same GDP?

If a country was to turn to a steady-state economy (or circular economy) where there is neither economic nor population growth with time, and there is no natural resources being added to the system ...
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1answer
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In the long run, would a production-possibility curve expand outward if the country preferred more consumer goods than capital goods?

PPC will not expand outward if the country preferred more consumer goods than capital goods. The total amount of resources in an economy at any given point of time is fixed. If a country ...
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Does ownership determine efficiency in an economic system?

what determines efficiency in an economic system? a) ownership b) competition c)both d) none I am confused between option (C) and option (B) because I am not sure about whether ownership can be said ...
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What would happen to the world GDP if we run out of minerals to mine but not of sources of energy?

I was thinking about how the depletion of minerals (metals and all material we mine from the Earth) will affect the GDP of the world. I read somewhere that at the current extraction rate, we will run ...
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1answer
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How would increase labor productivity lead to improved living standards of people in an economy?

I would like to know more about the mechanisms through which higher labor productivity would translate into higher living standards for a population in a given economy.
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Solow growth model on firms level

Probably a silly question, but I just have to make sure. I am wondering whether it is acceptable to use the solow / solow-swan growth model to model the growth of firm instead of growth of an economy?
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What is the difference between Q4/Q4 and Y/Y GDP growth?

Per US media, the US economy grew 3.1% in 2018 Q4/Q4 and 2.9% in 2018 Y/Y. 2.9% seems the reference number in various databases (World Bank, Reuters, Bloomberg, etc) but what exactly does Q4/Q4 mean ...
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657 views

In GDP growth studies, are factors of production measured as stock or flows?

Consider the following cases: One machine (capital) is used by multiple producers within one year. For instance, farmers renting tractors from the same company. In this case, in terms of GDP, there ...
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Attributing Labor Productivity Gains to Capital Deepening vs. Total Factor Productivity Growth

In a traditional Solow-Swan growth model, you can decompose growth in labor productivity (output/hour) into a component stemming from total factor productivity growth and another stemming from capital ...
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Is Botswana an industrialized country?

Is Botswana’s strong mining industry sufficient to consider the country as an industrialized economy?
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How can we know how PPF of our country looks like?

PPF of our country is based on potential the most efficient use of our resources, NOT their actual use. The problem is, it's unclear for me how to estimate said potential. How to know where ...
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How does domestic demand affect the domestic currency's value

If an economy grows, due to a tax reduction for example, how does that affect the exchange rate? My logic would be that reduced taxes put more money into people's pockets, which they then use to buy ...
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Who are the main proponents of the modernization theory of development?

I know that one of the first forms and defences of the *modernization theory of development" is Rostow's (1960) The stages of economic growth: A non-communist manifesto. What are other main works ...
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Labour-saving vs. Labour-augmenting technical change

I've read a number of posts on the above topic but none refers to published empirical papers. Google searches have been hopeless. Does anyone know of any paper on empirical derivation of technical ...
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Is my reasoning about economic growth and environmental sustainability correct?

Below is my attempt to answer question "Can we have economic growth and environmental sustainability?". Please correct me if I got something wrong in my reasoning. Let's see what is counted as ...
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655 views

Growth theory / Initial GDP: positive coefficient sign

I estimated growth regressions for several EU countries. In each of them, the sign of "initial GDP"'s coefficient is statistically significant but positive, which contradicts growth theory as well as ...
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annualized quarterly growth rate calculating

I was using R to calculate the annualized quarterly growth rate of real GDP by 400*diff(log(rgdp)). If I perform in this way some of the percentage change is big. However, if I calculate as 100*diff(...
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Is it reasonable, in panel data, to use past values of explanatory variables as instruments to deal with simultaneous causality?

I am trying to examine the determinants of economic growth, essentially regressing a number of variables upon economic growth. I face a problem that there is likely simultaneous causality between many ...
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Possible “debt-to-…” ratio indicators for debt-to-economic growth relationship?

Suppose we are interested in the relationship between public or external debt and economic growth. One can look at the debt-to-GDP ratio or debt-to-export ratio. What may be other possible "debt-...
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2k views

Quarterly GDP growth: YoY vs QoQ / terminology

Quarterly GDP growth can be calculated either in terms of YoY change or - in the case of seasonally adjusted data - in terms of QoQ change. (A third option would be to annualize the QoQ rate.) To ...
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Maximizing units under a budget constraint and increasing costs

Consider two columns. Column A has total cost per day, Column B has units bought that day. The marginal cost of each unit is increasing because of limited supply. My goal is to estimate total ...
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How to calculate Real GDP from quarterly change

How do I calcualte a countries Real GDP from QoQ changes? Example - Australia 2018 - Real GDP was 1432195178668.32 $Billion 2019 Q1 was 0.5% 2019 Q2 was 0.6% 2019 Q3 was 0.4% How do I calculate ...
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Can the stock market grow faster than GDP indefinitely?

My understanding of conventional wisdom is that average long-term growth of advanced economies is expected to be significantly lower than the average long-term growth of the value of the largest firms ...
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What would happen if someones money would disappear when they die

So suppose that when anyone died all their net worth would be liquidized and the money would be removed from circulation. how would this affect the economy? I know this question is a bit broad, but ...
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Modeling market growth, without compound interest or regression

I am working on predicting the growth of a certain market. Traditionally, this is done through a simple compound interest model: $$ ThisYear'sMarket * (1 + g)^n $$ What would be a better way to ...
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Question on Central bank loss function interpretation

How do you interpret this central bank’s loss function: $$L(\hat x, \pi)=\alpha \hat{x}^2+(\pi-\pi^T)^2$$ where $\alpha >0$ and $\hat x$ is output gap. Phillips curve is $\pi = \theta \hat{x}+\...
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Are there any net benefits in reducing/increasing tourist-oriented retail business?

Hong Kong is currently experiencing a slump in foreign tourist-oriented retail sales. Shops selling jewellery, watches, infant formula or Chinese medicine experienced a 25-35% decline YoY in August. ...
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Does everyone prosper through development projects?

Why don't all investors focus their intentions on development projects in less developed countries? Wouldn't this benefit all parties since the recipient country would be more developed and the ...
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Neoclassical Economic Growth Model Shadow Price for Discrete vs Continuous Time

I recently learned about the neoclassical growth model in both discrete and continuous time. The intuitive meaning of the shadow price for both cases is that it represents the value of one additional ...
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Larry Summers on the causes of secular stagnation

In an influential speech on November 8, 2013 at the IMF Annual Research Conference, Larry Summers suggested that slow economic growth in the years following the 2007–2008 financial crisis might be due ...
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The economics of a “no deal” Brexit

A "no deal" Brexit is presented in negative terms. In such a scenario the UK would set tariff schedules in line with trade strategy and protect domestic industry/agriculture with tariff rate quotas. ...
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Link between recession and decline in investments

I recently followed MIT online lectures for economy and I found this - one of the reason for investments decline in recession is bad expectations about economy -----> leading to Higher capital output ...

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