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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How to show the identity $I = S$ is valid in these applied cases?
Say we are in a closed economy where there is no government.
It is claimed that
$$I = S$$
is an accounting identity and so it's always valid.
I find it difficult to understand why this identity is ...
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How does "Buffet Indicator" work when market cap(nominator) is daily & GDP(denominator) is quarterly?
Simple question about "Buffet Indicator", but more like a question regarding the economic indicators in general.
Buffet Indicator = mkt cap / GDP
But as stated in the title, the market cap ...
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Splitting GDP between population
When looking at the average incomes in a country it is necessary to distinguish between mean income and median income. Mean income tends to be distorted by high earners, so typically median income is ...
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Theoretical equivalence, experimental distinction between GDI and GDP
Forgive me if this is a naïve or redundant question, I'm about 24h into my study of economics--but I've been trying to research this question and can't figure it out. Why does the national spending ...
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GDP doesn't add up in FED data - why?
To visualise the formula:
$$Y=C+I+G+NX$$
I downloaded the FED data and plotted it, only to discover the two curves progressively diverge (see chart below).
What am I missing?
thank you!
$Y$ = https://...
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Confused why GDP/GDP growth is a good measure
I am just a lay person confused about why GDP is a good measure. For example, in the news, it is always reported that GDP grew in the last quarter etc., or China is the only country experiencing GDP ...
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Is government/public sector percentage contribution to the GDP the same as government expenditure as percentage of the GDP?
As far as I understand, every transaction done in a country counts for GDP. So, if the government is building a road that counts for the GDP, right? So I was looking for a table which shows me the ...
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Does the goods part of the GDP only include goods produce during the last calendar year?
My textbook says this:
The quantity of goods and services includes only those goods and services that
manufacturers produced during the past calendar year.
If this is the case, does it mean that a ...
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Can an unprofitable company increase GDP?
One of the textbook ways to calculate GDP is through the factor payments. We sum up the cost of salaries and retained earnings of all firms in the economy (assuming no taxes or international trade).
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Do Non-Productive Investments Need to Be Written Down in GDP Accounting?
In this article, Professor Michael Pettis talks about how GDP can be overstated if non-productive assets are not written down.
However, I've seen in a few places (in the comment section of the link ...
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GDP Income Approach by industry: Public Administration calculation?
How is Public Administration generally considered when looking at GDP Income Approach by industry?
Is remuneration of employees the main factor considered, since there is no Operating Surplus?
I am ...
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real or nominal GDP to compare to wage price index?
The recent Australian budget projects trends over the next four years. I'm looking at a summary here. If I want to calculate the share of GDP going to wages, should I compare the percentage changes ...
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Why GDP is converted to 2010 $US constant in international studies?
GDP is a widely-used macro control variable in finance-related papers, especially for international studies. I am wondering what is the reason why GDP is converted to $US 2010 as noted by WorldBank.
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Why doesn't national savings, in aggregate, always equal to zero in monetary terms?
Referring to this question and this one
Imagine you had a closed economy with two people and they both started off with $100 dollars. How would net savings in aggregate ever not be zero? Anything ...
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How does the US have gross national savings while running a trade deficit?
If a country has a positive savings rate, that means that more money had to come into the country from somewhere outside of the country. However, we run a trade deficit, so we're actually sending more ...
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Does savings always equal investment? Are there any cases where savings could be removed from the economic system altogether and break the balance?
Assuming a closed economy, does savings always have to equal investment?
If an individual produces a certain amount of a resource and saves it, that becomes part of the savings of the economy. However,...
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Would a car that was produced last year but bought this year be accounted for in the GDP? [duplicate]
The equation for the GDP is: $$C+I+G+(X-M)$$
If consumers are buying new cars produced last year...would those still be included in the GDP?
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Modelling GDP growth rates with an AR(1) process
I am trying to model the growth rates of real output per worker. I read that GDP growth rates are often assumed to be stationary and are modelled using an AR(1) process, so I took logs and then took ...
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Why does the inflation not follow the money supply?
To my understanding classical economic theory tells us that inflation occurs when the money supply is increased faster than the economic growth.
Lately there has been a sharp rise in the rate of money ...
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Values of A,K,N,a in Cobb-Douglas function expressing GDP
In many basic macroeconomics textbooks a Cobb-Douglas production function with constant returns to scale is used to express the output of the economy as a function of labor and capital: $Y=AK^aN^{1-a}$...
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How is the differential definition of money supply, velocity, and GDP defined?
I was reading: This article on money velocity (see the summary section)
Where two formulas are presented:
first an equality:
$$\text{Quantity of Money} (M) \times \text{Velocity of Money} (V) = \...
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Would be there redistribution of wealth from actors with sticky prices to actors with more flexible prices under stagflation?
Suppose there is inflation in our country, but we take a short term, thus some prices are sticky and there is non-positive "growth" of the real GDP. In other words, we experience stagflation....
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Is GDP the market value of goods consumed or goods produced in a time period?
Definitions across various resources state that GDP is the market vaue of all goods 'produced' in a certain time period. But while calculating GDP by expenditure method, consumers' spending is one of ...
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Imports not used in the country, still counting in the GDP calculation?
When we calculating GDP we use the given formula
$GDP = C + I + P + X - M$
Here $M$ means the imports.
My question is: What if I am not currently using the imports. For example I might have by the ...
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What would be a an accurate metric of the real economy without the financial services sector?
A youtube video by RT predicts that China's economy will surpass the US in GDP by 2028. The conclusion was a result of projections of GDP growth for both nation's economies. According to anearlier ...
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Accounting for household work in the GDP
It is often told that domestic work is not included in the GDP estimates due to difficulty in measuring them. I wanted to know if there are any advances in measuring this, or any alternatives that ...
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Currency and GDP
USA's GDP (at this time) is ~21 trillion dollards, and UK's is ~2.8 trillion dollars, then how come UK's currency is more than USA's. By that I mean, 1 GBP gets you more than 1 USD.
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LM-Curve formula question
An LM Curve can be described as following
$M^d(Y,i) = M_0 + M_1Y – M_2i$
$M^d = M/P$
M and P are exogen
I know that $i$ is interest rate, and Y is GDP.
Why is $M_1$ and $M_2$ positive? And what does $...
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Derive IS-Curve (Y)
An Economy has a GDP described by the following:
$Z=C(Y −T)+G+I(r)$
$C(Y −T)=C_0 +C_1(Y −T)$
$I(r) = I_0 − I_1r$
where Z is planned expenditure, Y is GDP, T is tax, G is public consumption, I is ...
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Textbooks claim that the difference between GDP and GNP (or GNI) is about geography vs citizenship--is this correct?
Many textbooks claim that the difference between GDP and GNP is about geography vs citizenship. For example, Colander:
GDP is output produced within a country’s borders; GNP is output produced by a ...
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What explains why Puerto Rico has much lower GNP than GDP?
I can understand why some countries like Luxembourg, Singapore, and Ireland have much lower GNP than GDP.
But why is the same true for Puerto Rico? I would've thought that since lots of Puerto Ricans ...
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Economic interpretation: IS curve contra GDP in equilibrium
I have in a problem shown that for the IS curve (Y) contra the GDP in equilibrium ($Y^*$) it applies that: $\frac{\partial Y}{\partial G}>\frac{\partial Y^*}{\partial G}$. Where G is public ...
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A world only with two contries (net exporter)
We assume that we have two and only two contries: Albania and Bulgaria. There is complete free trade between the two countries.
The aggregate investments in Albania are given by:
$$I^A=A-ar$$
where $A,...
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How Does One Describe GDP Relations Assuming Only Wages and Profit Income in the One Person Economy?
I am trying to isolate a simple model for GDP accounting in the one person economy also known as the Crusoe economy. Because Crusoe lives alone and has dominion (exclusive control) over all items of ...
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How are housing costs reflected in factor shares of GDP?
The labour share of GDP in the UK is around 55% (Source).
Presumably all labour is supplied by households and all households need a house.
The average percentage of total monthly household income ...
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Connection between saving and investments-Y=C+I+G+NX [duplicate]
I understand
Y-G-C = I+NX = Savings . The equation that we see everywhere in economic textbooks. I see the mathematical logic.
BUT
Given that I = capital investment in GDP accounting surely Savings ...
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Is this a correct way of calculating productivity? And can the proposed data be (accurately) used for doing so?
I want to know if my thinking for calculating productivity [2019-USD/hour-worked] is correct.
Basics:
Take the GDP of a country and divide by the total amount of hours worked in that country -> ...
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World Bank and OECD statistics unmatch tax revenue as % of GDP
I have been looking for statistics on tax revenue to GDP ratio of different countries. I've found it on World Bank website.
https://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZS?view=chart
which ...
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How can the GDP's growth rate be positive, when the GDP decreases?
I have question about following charts in Mozambique. Here is GDP of Mozambique in 2010-2016 - https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2019&locations=MZ&start=2008. You can ...
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GDP of domestic and foreign economic activities of a country
Is there an indicator which shows how much GDP of a country is generated by domestic economic activities (e.g. business between food production in Germany and agriculture in Germany) and how much GDP ...
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Does GDP typically refer to Real GDP or Nominal GDP?
I previously believed GDP typically refers to nominal and real GDP is specified explicitly. However, in data sources like this, does it refer to Real GDP growth or Nominal GDP growth? Real GDP growth ...
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GDP per Capita in Panel Data: Must the base year be the same for all cross-sections?
I'm trying to run a small project using time series in panel data. One of the variables used is the GDP per capita for a few countries (the countries are the cross-sections). Is there a problem if the ...
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Does real GDP control for changing preferences?
This claims that real gdp does not account for changing preferences.
However, if preferences were to change for sneakers and subsequently pushes the price up, won't this be reflected in the changed ...
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How to find US total debt?
Sorry i'm not really an economist but I don't know where else to ask.
I'm reading Ray Dalio's Big Debt Crises and he has several graphs for total US debt burdens
https://i.sstatic.net/YudBD.jpg
where ...
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How do you stop Hyperinflation in a Nation?
In history, I learned that the Weimar Republic had hyperinflation as a consequence of leading and striving war during World War I and placed a new currency named German Rentenmark which would be about ...
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Treatment of natural disasters and wars in consumption of fixed capital
Assets destroyed by natural disasters and wars are not included in consumption of fixed capital (CFC) in the US NIPA or the UN SNA.
Suppose though that the US decided to start including such asset ...
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Is investment in real estate a real investment?
In the book The Financial Crisis and the Free Market Cure in chapter 3 author said that investment in real estate is not really investment.
It is jobs that create ...
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What is the public spending / government expenditure share of GDP in Europe?
I have found data that seems to be contradicting:
statista gives public spending at country level between 40% and 60%, but
eurostat gives an aggregate figure of about 20%, as shown in the following ...
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Why did non-seasonally adjusted gdp usually drops on Q4 and Q1?
Yesterday, i stumble upon some of my country macroeconomic data, and i found some interesting pattern on quarter-on-quarter gdp growth, almost every Q4 and Q1 has a negative growth. After checking ...
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Does salary contribute to GDP under the expenditure approach?
The question really confuses me. On one hand, we can consider the wages as purchasing services from employees. On the other hand, the salary is also part of the cost of the products, thus it isn't &...
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