Economics Project
The National Economy National Economy Data Sources Bureau of Labor Statistics Federal Reserve Board (FED) Central Intelligence Agency (CIA) FRED IMF World Bank National Economy Issues GDP Bureau of Economic Analysis (BEA) National income and product accounting (GDP) GDP Revisions Preliminary, Revised, and Final reports. Only 50% of data available on preliminary report: use extrapolation to complete the data set. Adjusting for Inflation: Real vs. Nominal GDP “Fixed” vs. “Chained” weighting. Underground Economy No moral or aesthetic evaluations of “production” Omission may lead to an overstating of poverty, unemployment, and productivity. Measuring methodology: Surveys Compare national income to national expenditures. Analyze labor force data to show “missing” participants. Compare electricity usage with reported production. Analyze money supply distribution for excess transactions. National Economy Issues Genuine Progress Indicator (GPI) GPI Corrects GDP for environmental degradation, inequality, crime costs, loss of leisure time, public infrastructure, volunteer activities, and housework. Shows no productivity enhancements from 1974 -2004 despite GDP per capita doubling. International Comparisons CIA Factbook IMF Ranking World Bank Purchasing Power Parity (PPP) When making international comparisons PPP adjusts currency values for the amount of goods a given unit of currency can buy. Is China “catching up” with the US? Working backwards with growth rates, 1952 per capita income in china would have been $279, an unsustainably low figure. Absent PPP adjustments China is 2/3 the size of U.S (IMF 2015). With PPP adjustments China is close to 100% of U.S. (IMF 2015). National Economy Issues Labor Productivity BLS Erratic due to business cycle/employment lags. Typically measured in “output per hour of labor”: output/labor hours Problem: how to measure labor hours. At home work may overestimate productivity. Off shore outsourcing lowers costs and overestimates U.S. productivity. Problem: how to measure output. Missing quality improvements of products may underestimate productivity. Recording higher quality products inaccurately may overestimate productivity: “inside the box” effect. Services are difficult to quantify: Health care and government services may underestimate productivity enhancements and consequently overestimate increase in the costs of these provisions. National Economy Issues Savings Rates FRED BEA Personal vs. Business Savings. Saving, Investment, & Capital Formation. Decline in savings rate may not coincide with lower investment rate since business savings fuels investment as well. Some economists believe a “Genuine National Savings Rate” could be measured as actual capital formation which takes it to over 50% of GDP. National Economy Issues Consumer Confidence Conference Board Michigan Survey of Consumers Important leading indicator when economy is heavily weighted in consumer expenditures. International Statistics IMF Direction of Trade Statistics World Bank Trade stats have high month -to -month volatility . Poor quality data often lead to inconsistencies . Global imports do not equal global exports. Globalization Assembling in one region and selling in another. May inaccurately reflect where production takes place.
