to analyze an economy some starting points n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
To analyze an economy: some starting points PowerPoint Presentation
Download Presentation
To analyze an economy: some starting points

Loading in 2 Seconds...

play fullscreen
1 / 10

To analyze an economy: some starting points - PowerPoint PPT Presentation


  • 68 Views
  • Uploaded on

To analyze an economy: some starting points. Simple indicators Gross National Product Balance of Payments. GDP Growth Unemployment Inflation Interest rates Exchange rate Balance of Payments Economic policy. Development Welfare Quality of life Income distribution Rule of law

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'To analyze an economy: some starting points' - sanaa


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
to analyze an economy some starting points

To analyze an economy: some starting points

Simple indicators

Gross National Product

Balance of Payments

how do you describe an economy
GDP

Growth

Unemployment

Inflation

Interest rates

Exchange rate

Balance of Payments

Economic policy

Development

Welfare

Quality of life

Income distribution

Rule of law

Democracy

Sustainability

How do you describe an economy?
basics
Basics
  • Gross national product (GDP)
    • the value of all goods and services produced in an economy during a year (aggregated value added)
    • rought proxy for ”development” or ”welfare”
  • national produkt = nationalvincome
    • since value added is what the firm pays to employees and capital owners
how good a measure is gdp
How good a measure is GDP?
  • Includes mainly market transactions (unpaid home work and ”black markets” excluded)
  • evaluation based on market (or based on cost, as in the case of public services)
  • does not say anything about income distribution, environment, quality of life

…but no simple alternatives available

some identities
Some identities

GDP = Consumption (C) + Investment (I) + [Exports (X) - Imports (M)]

Sometimes simpler to reshuffle and state as

GDP + M = C + I + X

(supply = alternative uses)

identities
Identities
  • Can be further manipulated to state the relation between internal and external balance

S - I = X - M

(internal balance = current account)

current account
Current account
  • Not only a measure of external balance, but also reflection of internal balance
  • Deficits may or may not be serious depending on
    • why a deficit has been generated
    • how the deficit is financed
balance of payments
Balance of payments

Trade balance (X - M for goods)

+ Service balance (X - M for services)

+ In and outflows of capital incomes

+ In and outflows of transfers and gifts

= Current account

= Capital balance (with opposite sign) that shows how a deficit is financed or how a surplus is invested

capital balance
Capital balance
  • Capital balance = foreign direct investment + portfolio investment + loans + changes in foreign reserves + errors and omissions
  • Should always equal the current account but with the opposite sign