Questions tagged [gdp]

Gross Domestic Product (GDP) is a flow measure of the value of finished goods and services produced within a country's borders in a specific time period. GDP is typically calculated on an annual basis.

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6
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3answers
735 views

Do circular invoices count in GDP?

I'm trying to understand GDP and what it means. Say that there are two US software companies, Foo Inc and Bar Inc. Foo Inc produces software and charges Bar \$1 million for its usage, while Bar Inc ...
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2answers
33 views

Country GDP vs Exports - why such a big difference?

I discovered that country ranking by GDP and Exports are very different. Largest by GDP ...
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2answers
38 views

Why does a positive output gap imply workers working overtime?

From Investopedia, "A positive output gap indicates a high demand for goods and services in an economy, which might be considered beneficial for an economy. However, the effect of excessively ...
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1answer
26 views

MNCs income greater than origin GDP

Can anyone explain why the net income of some MNCs overwhelmingly surpass the GDP of countries/regions, where their sources of labor/raw materials are located? Accompanying references are welcome. P.S....
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0answers
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Why couldn't India grow its economy as fast as China did?

I was listening to this debate on India vs China. Professor Dr. Kishore Mahbubani posed this question (watch from 17:21). Let us see the following graph: India has a population comparable to China. ...
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0answers
13 views

GFCF/GPDI in Real GDP Calculations

I'm trying to understand how GPDI / GFCF are used in the real GDP calculations (when compared to net investment). In both the US / Denmark, the real GDP numbers seem to directly GPDI / GFCF without ...
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1answer
11 views

Second-hand products in GDP

I am aware that secondhand goods are not counted in GDP due to double counting issues, but I want to ask about a specific case of transaction of second-hand goods. For instance, what if a student ...
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1answer
34 views

GDP calculation on selling house at a profit

This question may appear to be naive, however, since I am having problems understanding it, I had to resort to ask it here. How will the sale of an old house at a profit affect the GDP? Let us say I ...
3
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2answers
98 views

Why GDP series always has an unit root problem?

In one of the lecture slides of class that I am currently taking our professor mentioned that when it comes to the GDP is it safe to always assume it has unit root and testing for it is just ...
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0answers
16 views

Increase in Debt / GDP positive or negative for currency?

When a nation-state and/or monetary union increase it's debt to GDP ratio. Is this a net positive or negative for its currency?
2
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1answer
28 views

What does 'Health spending as a share of GDP' mean?

I am watching a video essay talking about healthcare spending in different countries and one of the first graphs shown was titled: 'Health spending as a share of GDP'. After doing some reading, I ...
3
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1answer
39 views

An easy GDP growth question

A woman pays her gardener £60 per year and later married him. The gardener continues to work in the garden but unpaid. The woman earns £1000 before and after the marriage. Statement: the marriage ...
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1answer
35 views

Does Direct Benefit Transfers make an economy poorer?

Printing money and giving to the poor causes inflation. Increases demand and hikes prices. This is basically certain. But on the contrary, a paper titled Debunking the Stereotype of the Lazy Welfare ...
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10answers
8k views

Why do we need to “get the economy moving again”?

Sorry I have no background in economics but as a computer programmer, I specialise in building models out of simple math and logic, so I hope we can speak the same language without having to get into ...
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1answer
34 views

How do the factors of production map to the GDP identity?

How do the 4 factors of production (nature / capital / labour/ entrepr.) map to the GDP components in: $$Y=C+I+G+(X-M)$$ To me it seems that all factors map to all GDP components, simply because it's ...
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0answers
20 views

What is data trapezoid form?

For one of our class project we are required to do the following: Download U.S. real GDP in data trapezoid form (vintages) I tried to search online for what does the data in trapezoid form means ...
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1answer
31 views

GDP Discrepancies

I'm trying to practice reading economic data from FRED and BEA websites, but they seem to be providing conflicting data that I cannot understand at all. For example, looking at Real GDP percentage ...
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1answer
21 views

Understanding GDP Chart

When I Google "GDP of 1950", I get ~$300 Billion. Looking at the graph @ https://fred.stlouisfed.org/series/GDP . I see Q1 280 billion Q2 290 billion Q3 308 billion Q4 319 billion My questions: ...
3
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1answer
31 views

What is the effect on GDP when foreigners buy lots of domestic bonds?

I am trying to figure out the effect on GDP of foreigners buying lots of domestic bonds. From what I understand, when foreigners buy lots of domestic bonds: They need to convert their foreign ...
2
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1answer
36 views

Are the EU funds coming from EU citizen's taxes as well?

I was trying to understand how the EU is funded using their official website, but my limited understanding of economy makes it very hard to understand the money pathways from a single unit (the ...
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0answers
40 views

What is the best measure for the world's economic cycle?

I'm trying to make a graph that shows how the return of major assets (S&P 500 index, % of 3Y T-notes, oil, gold, etc) move along with the world's expansion& recession cycle. I looked into ...
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2answers
92 views

Bananas and oranges in communist countries

This is a question I wanted to ask for a long time. If you check the GDP or East Germany in 1989 and compare it to that of banana-producing countries you can see: ...
2
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1answer
42 views

Why does the answer not include increased negative unplanned stock investment?

I will focus on the event "c": The answer for "c" is following: A sharp increase in the rate of real GDP growth leads to a higher level of planned investment spending by producers, according to ...
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1answer
35 views

How to solve duplicate couples error in unbalanced dataset

I am trying to perform a regression on unbalanced panel data in R. In order to set the data as panel data, I use the following code: ...
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1answer
45 views

How does the GDP multiplier work?

When we learn about the GDP multiplier, it is portrayed as 1/MPS, because savings are supposedly a leak out of consumer spending. However, what I don't understand is aren't those savings spent anyways ...
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0answers
14 views

Controls for a GDP per capita model

I'm constructing a model to test the relationship of some different factors on GDP per capita in a single year using simple OLS regression. Most studies I've found on economic growth simply use the ...
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2answers
28 views

How does capital investment (factory, plant, etc.) benefit the region they are located in?

Generally, capital investment is always good for the economy, but I am not sure about the underlying mechanism. For example, if a car factory is built in a certain state, does it improve the economy ...
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2answers
30 views

What does the seasonal adjustment curve for major macroeconomic metrics look like?

All the explanations of seasonal adjustment that I found from a quick search either don't give any quantitative examples, or give an example with a time series that is either made up or represents an ...
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2answers
29 views

How is GDP counted between different countries?

Sorry if this question is dumb, but I did not manage to find the answer on the web. The questions is as follows: As far as I understand, GDP is the total value of a country's production. It includes ...
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1answer
35 views

Why is Pakistan's GDP higher than Bangladesh in PPP but lower in Nominal?

Why is Pakistan's GDP higher than Bangladesh in PPP but lower in Nominal? Kindly explain in layman's terms.
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1answer
29 views

Does the investment component of GDP (demand side) identity include expenditures by the government and households?

In the identity GDP=C+I+G+(X-M) does "I" include expenditures by the government and households? For example, if a construction firm builds new residential properties and a household buys this ...
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2answers
38 views

Unit root testing in Eviews

I've plotted my data log(GDP) which displays an albeit small upward trend. However, after performing an ADF unit root test log(GDP) it suggests that I can reject H0 [that there is a unit root] at the ...
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2answers
66 views

Why is such a high US national debt not resulting in another great depression?

The chart below shows that US national debt as a percentage of its GDP is at an all time high excluding the one during WW-II. While I'm not as well informed in economics as most of the people on this ...
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2answers
34 views

Inflation vs GDP growth as factors driving down the US debt-to-GDP ration post-WW2

I'm trying to figure out how much inflation (vs GDP growth) shrank the debt-to-GDP ratio (in the decade or so) post-WW2 in the US. I found one paper that says: In 1946, the debt ratio was 108.6 ...
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1answer
40 views

What are the advantage of chain-linked prices over constant prices?

Some variables in economics like GDP are computed in chain-linked prices or constant prices. What are advantages of chain-linked prices vs constant prices? Thank you
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1answer
29 views

Assumptions in GDP calculation

The standard approaches for calculating GDP are: $$ \text{GDP} = \text{Consumer Spending + Capital Investments + Govt. Spending + Net Exports} $$ And $$ \text{GDP} = \text{Total wages + Profits + ...
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2answers
74 views

Does “I” in Y = C + I + G + X - IM refer to the domestic investment?

We know the national income identity: $Y = C + I + G + X - IM$. From many resourses, $I$ refers to domestic investment. For example in this link: https://opentextbc.ca/principlesofeconomics/chapter/...
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0answers
18 views

Which one of these sources best represents fiscal deficit data?

I'm currently recollecting data for an econometrics model I want to build later on with a panel data model. However, sometimes it is difficult to find certain information. For example, I want to ...
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2answers
63 views

Isn't recession is when there's an actual decrease and not just a less rapid growth?

I heard that for 2020, the global economic forecast is recession. The growth will be less than 2.5%. But isn't recession is when there's a decrease in GDP (for two consecutive quarters, as I recall), ...
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2answers
47 views

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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1answer
17 views

what is potencial GDP?

The Wikipedia defines potencial GDP as "the total capacity of a nation to produce goods and services". If this definition is correct than the potential GDP can only occur when the unemployment rate is ...
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0answers
18 views

(AD-AS model) How is it possible for firms to spend less, but supply more at higher price level, assuming no increase of the SRAS?

According to the interest rate effect theory higher prices will lead to lower GDP demanded because firms will spend less due to loans being more expensive. It seems at odds with what the SRAS curve ...
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1answer
20 views

Will the services rendered by a worker from an unorganized sector be counted in GDP?

My guess is it won't be because the unorganized sector isn't captured in GDP? but I read somewhere it will be. not sure if I am wrong or it was an error in the answer key. please help
0
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1answer
52 views

Is there an “ideal” ratio of tax revenue to GDP? Or, at least, can I assume a higher ratio is better?

At the link below, you can see countries have a huge difference in ratios of tax revenue to GDP. Is it fair to assume that a higher ratio is better? Does raising a substantial portion of your GDP in ...
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1answer
77 views

Why do expectations of inflation decrease SRAS (Short Run Aggregate supply)?

If firms and workers expect the prices to rise, the short run aggregate supply will shift to the left to SRAS2. (https://www.albert.io/blog/what-shifts-aggregate-demand-and-supply-ap-macroeconomics-...
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0answers
42 views

China's GDP is seven times larger than during the SARS outbreak — what's the implication for China?

I have been compiling some figures to compare China's macro conditions in 2003 and 2019. Clearly, much has changed in nearly twenty years. In particular, a few indicators really stand out. For ...
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0answers
11 views

Is it better to calculate inflation rate using GDP deflater whether based year is the first year or last year of our data?

if we wanna calculate inflation rate for years 1997 and 1998, there are 2 ways, first is set our base-year 1997 and according to my data it will be 0.39 and if we set the base-year 1998 the rate will ...
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0answers
18 views

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 ...
0
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1answer
20 views

Shouldn't national Stock Indices proportional to GDP of the country?

I was looking at Japan: Japan's GDP trajectory and Nikkei 225. It seems from 2011 - 2015 the GDP contracted but the Nikkei has gone up. Would there be a good explanation for this ?
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1answer
42 views

If a Chinese person wants to buy an iPhone or any international goods, which GDP per capita would be a better indicator?

Which GDP per capita of a Chinese citizen would better reflect their affordability- Nominal GDP per capita or PPP GDP per capita of China? My question is would PPP would matter much in case of buying ...

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