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# Tag Info

8

As you have pointed out: where it comes from is very important. As to the Japanese situation it is quiet different from the US position from example. In fact most of the Japanese debt is owned by Japanese people (90% of the current debt). More specifically the BoJ plays a big role as a buyer, and puts pressure on Japanese yield, which makes it cheaper for ...

7

Definitions: Investment is the purchase of any (new) capital goods. A capital good is any good that is used to produce other goods and services. A house produces a stream of housing services. Hence, a house may be regarded as a capital good. And thus, the purchase of a house may be regarded as investment. Note though that definitions and lines in ...

6

I don't think you can sensibly discuss this without including two additional factors: what is the prevailing interest rate? is the debt in local or foreign currency? The first affects the cost of repayments. Interest rates are at record lows in the developed world. How much money is it reasonable to borrow at 0%? What about -0.1%, is there even a limit ...

5

It's complicated, and it is supposed to depend on where the ships are generally operating from, rather than the country of the firm that owns the ships or the flag under which they are flown. Under the 2008 System of National Accounts (the international standard for calculating GDP), overseas shipping is generally to be allocated on the basis of the ports ...

3

There is a key factor determining a country's likelihood of default which has only become a research topic in the last decade or two: The quality of its government, in particular the prevalence of corruption. (Interestingly, the type of government -- democracy, autocracy -- is comparatively unimportant.) Greece has a poor political system; cronyism and ...

3

There are three ways to define GDP: Expenditure approach: The sum of all expenditures on final products. The only final products in this economy are cars; steel, machines, and tires are intermediate products. By this definition, GDP is 5000. Of this amount, 1000 is exported (NX), so 4000 must be consumed domestically (C). There is no information about I and ...

2

The National Income and Product Accounts (NIPA) are used to calculate GDP. The Bureau of Economic Analysis (BEA) prepares methodology papers discussing how they calculate various contributions to the NIPA. They happen to have one on software for business software and this paper should be use: This section describes the methodologies used to prepare (1) ...

2

The key point is not the Debt/GDP ratio by itself but the sustainability of the debt over time. The government borrows money from the market and uses taxes to repay it, as households borrow money from banks and use their income to repay it. Before moving on, let's look at a simple debt accumulation equation where b(t+1) is the debt/GDP ratio in period t+1....

2

It is an national accounting reason, rather than the Irish people have higher incomes or being more productive It seems that some companies previously deemed to be foreign are now deemed to be Irish, and so their profits now count towards Irish GDP (and, to the extent they are not a subsidiary of a foreign company and retain their profits, also to Irish ...

2

In the UK, which uses what is know as "the output approach", the Office for National Statistics (ONS) sends out around 45,000 surveys to business, called the Monthly Business Survey (MBS). The ONS claims that this covers "around 55% of the economy.". In this survey, questions about turnover and purchases are asked which then allow the ONS to assign total ...

1

This is accountancy and double-entry bookkeeping, but intuitively there are two ideas underlying this: The net difference between domestic investments and domestic savings has to be financed from abroad (or leads to financing foreigners if domestic savings exceed domestic investments) and this is reflected in the financial or capital accounts of the balance ...

1

You are correct in saying that a household is not comparable to the U.K. or any other country. A household does not issue currency and bonds and typically cannot issue debt obligations that are good beyond, say, approximately 30 years. A person in a household can borrow for approximately 30 years to buy real estate but it would be difficult for that person ...

1

You largely answered this question yourself: you provided this reference to a Gennero Zezza paper: (link to paper) Zezza states in the second paragraph that most of the thinking about the Paradox of Profits was mistaken, as the authors used models which were not stock-flow consistent (flows disappeared). If people are arguing that there is a paradox, but do ...

1

The IMF Data, the UN Country Data or the World Bank Open Data should be good data sources covering a wide range of countries.

1

Yes, it can happen if a company is selling things for less than it cost it to produce them, though for obvious reasons this doesn't happen very often (or at least not over any great length of time) as it usually doesn't make sense to continue producing in those circumstances. You might see it occasionally, for example, in small farm businesses. These can ...

1

The government debt represents the total liabilities outstanding that the government must (at some point) repay to investors. Generally to do so, governments tax their populace, either now, or at some future point. The often cited Debt to GDP ratio figure is one shorthand for understanding how difficult it will be for any given government to raise the ...

1

You can think of the capital account as "exports of liabilities" - a capital account surplus means that a country is exporting liabilities (borrowing) from abroad to pay for imports of goods and services and/or for income transfers abroad (a current account deficit). An increase in foreign assets owned by the US is an import of liabilities: the US is buying ...

1

Answering to the who: the GDP is usually calculated by a statistics agency of the government. In the US it is the America’s Bureau of Economic Analysis; in Britain, it is the Office for National Statistics. About how it is done in practice, take a look at this question: https://economics.stackexchange.com/questions/12311/how-to-measure-gdp-in-practice/17812

1

Statistical Agencies do not necessarily obey the habits of Economic Theory. There is no "mistake" here (certainly, there is no double-counting), but a different approach to what each concept means or "should mean" (which sometimes is also a consequence of historical precedence). For the fun of it I post below how the same data could be arranged to conform ...

1

I assume your numbers come from the 2012 numbers on page 4 or 5 of this document, which are rather different to the 2012 domestic demand numbers the IMF published a year earlier on page 28 or 29 of this document (the earlier version had domestic demand increasing in 2012 by 0.3% rather than decreasing by 0.6%) They do look curious, for the reason you give. ...

1

I think a lot of people here gave some really good answers, including the person who got some downvotes. 240% debt-to-GDP ratio is based on a mathematical calculation. For example, currently here in the United States, we have a 105% debt-to-GDP ratio ($22Trillion ÷$21Trillion = 1.05) That is the calculation used to arrive at that 240% you speak of. Both ...

1

Not much point in writing a lot about an equation that any sovereign debt analyst should know. Sustainability definitely has to do with debt/gdp, the prevailing interest rate for sustaining that debt and the primary balance that the country can run. The IMF has a nice enough preso on this: Fiscal and Debt Sustainability and I'd recommend going there ...

1

Ok so I think I'm starting to get it. But I'll still be glad if somebody confirms this + corrects the flaws there still are. The reasoning is that everything that is spent (GDP) goes to somebody. If we remove Govt employees salaries, VTA and imports from G, C and I, and add exports, we get companies sales. So : Companies sales = G + C + I - Govt Salaries - ...

1

It is right that the whole savings are invested. You can use the (simplified) national income and the national output to show the equality. The national income is $NI=S+I$ The national product is equal to the national income: $NP=NI$ The national product is equal to the sum of consumption and investment: $NP=C+I$ By using this three equations it can ...

1

I'd like to read more on "intergovernmental guarantees", but I believe it's something similar to how the US government implemented the bailout. The 2008 stimulus of \$700 bn was the right to spend this money over time. So, this amount entered government spending only gradually. (I think that's also what @BKay's quote says.) But as we found out here, the ...

1

I don't know of a full accounting in the Eurozone but Measuring the True Cost of Government Bailout (Block (2010)) provides a look at the on- and off-budget costs of the bailouts in the United States and finds they were substantially off-budget. Government intervention to assist individual businesses and industries during the 2008–2009 economic crisis ...

1

If I interpret your question correctly, you're asking what percentage of Algerian national income is derived from oil and gas extraction. The answer appears to be 30% from the website. I think the problem is you're assuming that the 30% figure means something like '30% of private spending', and so you're trying to account for government spending as well. ...

1

Blanchard, Macroeconomics 6th, p. 20 is a good and easy start. If you want more, then yes good directly to the office' publications. The BEA has a very complete documentation.

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