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Why GDP is converted to 2010 $US constant in international studies? They do that in order to express GDP in real terms. This is incredibly important because nominal GDP is very deceptive since money constantly changes its value. US dollar in 2005 is completely different dollar from US dollar in 2021 so GDP expressed in 2021 US dollars can't be compared to ...


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Premises of your Q are simply false: 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. This is completely incorrect. Total savings of a country is sum of private and public saving. For an open economy output is given by $Y=C+I+G+X-M$ (where $Y$ is output $C$ consumption $...


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I think this boils down to misunderstanding what saving in macroeconomics is. Saving does not cancel each other out. In closed economy, private saving is difference between income (which is by definition equivalent to output so I will be using output and income interchangeably) and consumption $S=Y-C$ and public saving is difference between government ...


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Does savings always equal investment? If we are talking about national accounts then yes. Output of closed economy is given by: $$Y = C+I+G \tag{1} $$ Private saving $S_p$ is by definition is disposable that is not consumed (see further explanation in Blanchard et al. Macroeconomics an European Perspective pp 55) so: $$S_p= Y- T-C \tag{2}$$ Public saving $...


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GDP is actual production. Since the car was produced last year, it adds to last year's GDP. Since it wasn't sold, it would show up in inventory investment (which seems to be included in I in your equation). This year, when the car is sold, inventory investment goes down and consumption goes up by an equal amount, so there is no effect on GDP. Pop quiz: ...


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There are two approaches. A.Multiply real gdp by a constant so the result equals nominal gdp in 2000 (instead of 2005). That constant is (nominal gdp in 2000 / real gdp in 2000) B. Create a new deflator that equals 1 in 2000, and use it to convert nominal to real. That new deflator is (deflator / deflator in 2000) Note: you can multiply this by 100 if you ...


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