4

Have you read: Barro and Sala-i-Martin (2004, 2e), Introduction Acemoğlu (2009), Introduction Paul Romer (2016), "The Deep Structure of Economic Growth" Robert Lucas (1988), "On the mechanics of economic development", Introduction: I do not see how one can look at figures like these without seeing them as representing possibilities. Is there some action ...


3

why would they force to trade in U.S. dollars instead of just taking the oil from their country by force? One of the basic tenets of power is that $control$ is superior to $ownership$. War is expensive, oil must be stored before it is used, and any captured production assets must be defended and maintained at great cost. Rather than own all of this ...


2

No. There is nothing in the economic literature on a post-service world. It is true that the development of most countries follows the agriculture -> manufacturing -> service pattern. There is nothing to suggest another sector coming after services.


2

The value is subjective. If the buyer values the shoes at 10 yuan and the seller values 10 yuan at 10 yuan then from economic perspective equal amount of value was exchanged (i.e 10 value of yuan embedded in paper notes for 10 value of yuan embedded in shoes) regardless of what were the costs of production costs. Also money just serves to solve double ...


2

In short, the belief this reflects is that cheap money is spent more freely. Since GDP counts the sum-total of value-added transactions in the economy, in principle this means that monetary policy affecting the velocity of money can in turn affect GDP. Theoretically, this is valid to the extent that debt-servicing costs are a significant friction in the ...


2

In your comment you say you want the answer in context of the classic textbook model for goods market/output equilibrium. Following the Blanchard macroeconomics textbook lets consider closed economy so the output will be given by: $$Y=C+I+G$$ where $Y$ is output/income (they must be always equal), $C$ consumption, $I$ investment and $G$ gov. spending. ...


1

Not sure what you mean by formally proven in this case, but it’s just true by definition. Macroeconomics is by definition branch of economics that studies the behavior of economy as a whole as opposed to individual markets or actors separately which is studied by Microeconomics. General equilibrium is by definition an equilibrium of whole economy or ...


1

If you could include the source(s) you were talking about that would be great. Without further info, my initial guess is that the Q4/Q4 means you compare GDP in 2018Q4 to GDP in 2017Q4. Y/Y means you compare GDP in the whole year of 2018 to that of 2017. Upon further inspection, if you take a look at the US's real GDP, you'd get the following: Growth in ...


1

I am not sure if 41% is correct I wanted to double check it but could not find a reference to primary source for 41%, but the overall narrative seems to be true. For example, Reinhart, C. M., & Smith, R. T. (2002), in their paper that you can read here argue that Switzerland in the late 1970s in which substantial capital inflows – partly ...


1

I'll try to answer your question as best as I understand it. There are innumerable reasons for why taking oil by force from these nations would be seen as unnecessary by the US, for both political and economic reasons. Just to name one risk, the condemnation of the world community and the breach of trust in our status as a relatively non-predatory hegemon ...


1

You can estimate it in multiple ways. If you have panel data then you could first log linearize the expression giving you: $$ln(F_{it})=ln(A_{it}) + \alpha ln(K_{ti}) + (1-\alpha) ln(L_{it}) $$ Which could be estimated in multiple ways. You could estimate it as a pooled cross-section where the technology would be assumed constant across the time and same ...


1

In a nutshell, a higher GDP is the very same as an increase in average incomes, at least if the population remains constant. If there is more stuff produced and consumed, overall income is higher and average income as well. As you rightly point out, since income is measured in monetary terms, one has to correct for price increases. And this is usually done. ...


1

$W(4) = \max\left\{4+bW(4),\frac{1}{2}\left(4 - k + bW(4)\right) + \frac{1}{2}\left(16 - k + bW(16)\right)\right\}$ $W(16) = \max\left\{16+bW(16),\frac{1}{2}\left(4 - k + bW(4)\right) + \frac{1}{2}\left(16 - k + bW(16)\right)\right\} = 16+bW(16)$ First solve for $W(16)$ to get $W(16) = \frac{16}{1-b}$. Then substitute it in $W(4)$ to solve for $W(4)$ as a ...


1

This is some dynamic supply-demand model (I am not aware of it having some special name). The first equation gives you the evolution of prices. It says that there will be inflation if there is excess demand $d_t>s_t$ and deflation if there is excess supply (that’s why the first equation has ($d_t-s_t$). The second equation tells you how supply changes ...


1

It's not about riches. According to the CIA World Fact Book, World Gross Domestic Product per person in Purchasing-Power-Parity USD was estimated at 17,500 in 2017. And it was only 7,200 PPP USD in 2000. Now assume away all inequality. That would mean that a family of four, say two adults and two children, would have 70.000 USD living in USA... sounds a lot?...


1

There are two reasons for that as far as I can see: In past macroeconomics combined not just what we think of macroeconomics today but also a great deal of public economics which deals with inequality (one can see that just by looking at the writings of Keynes or Hayek). However, nowadays macroeconomics don’t deal with distributional questions any more ...


1

Friend, To find non-profit organizations (non-government) expenditures within the national accounts for GDP you can visit the BEA site (www.bea.gov) and go to the national accounts table 1.13. non-profit organizations is listed as Nonprofit institutions serving households (line # 49). To attempt to answer your question it would fall between firms and ...


1

Your conclusion would be correct in pure endowment economy where there is no production $Y(L) =0$ (assuming only labor as factor of production) and everyone has the same endowments. In an endowment economy where there is no production and GDP is just dropped on both home and foreign country trade is indeed a zero sum game as $M$ subtracts from your endowment ...


1

Indeed, their theory relates primarily household debt to net exports. This is the main focus of their working paper. However, as a referee, I would try to find out more and ask whether the change in net exports comes from imports or exports, or whether household indebtedness could also affect international transfers. A household may use debt to invest abroad ...


Only top voted, non community-wiki answers of a minimum length are eligible