大二上宏观各章课件

1、Learning objectivesIn this chapter, you will learn about:Gross Domestic Product (GDP)the Consumer Price Index (CPI)the Unemployment RateGross Domestic ProductTwo definitions:Total expenditure on domestically-produced final goods and servicesTotal e earned by domestically-located factors of productio

2、n Why expenditure = eIn every transaction, the buyers expenditure es the sellers e.Thus, the sum of all expenditure equals the sum of all e.The Circular FlowValue addeddefinition: A firms value added is the value of its output minus the value of the intermediate goods the firm used to produce that o

3、utput. Exercise: (Problem 2, p.38)A farmer grows a bushel of wheat and sells it to a miller for $1.00. The miller turns the wheat into flour and sells it to a baker for $3.00. The baker uses the flour to make a loaf of bread and sells it to an engineer for $6.00. The engineer eats the bread. Compute

4、value added at each stage of productionGDPFinal goods, value added, and GDPGDP = value of final goods produced = sum of value added at all stages of productionThe value of the final goods already includes the value of the intermediate goods, so including intermediate goods in GDP would be double-cou

5、nting. The expenditure components of GDPconsumptioninvestmentgovernment spendingnet exportsConsumption (C)durable goods last a long time ex: cars, home appliancesnon-durable goodslast a short time ex: food, clothingserviceswork done for consumers ex: dry cleaning, air travel.def: the value of all go

6、ods and services bought by households. Includes:U.S. Consumption, 2001Investment (I)def1: spending on the factor of production capital.def2: spending on goods bought for future use.Includes:business fixed investmentspending on plant and equipment that firms will use to produce other goods & services

7、residential fixed investmentspending on housing units by consumers and landlordsinventory investmentthe change in the value of all firms inventoriesU.S. Investment, 2001Investment vs. CapitalCapital is one of the factors of production. At any given moment, the economy has a certain overall stock of

8、capital. Investment is spending on new capital. Investment vs. CapitalExample (assumes no depreciation): 1/1/2002: economy has $500b worth of capitalduring 2002:investment = $37b1/1/2003: economy will have $537b worth of capitalStocks vs. Flowsstockflowa persons wealtha persons saving# of people wit

9、h# of new collegecollege degreesgraduatesthe govt. debtthe govt. budget deficitFlowStockMore examples:Government spending (G)G includes all government spending on goods and services.G excludes transfer payments (e.g. unemployment insurance payments), because they do not represent spending on goods a

10、nd services. Government spending, 2001Net exports (NX = EX - IM)def: the value of total exports (EX) minus the value of total imports (IM)An important identityY = C + I + G + NXwhere Y = GDP = the value of total output C + I + G + NX = aggregate expenditureA question for you:Suppose a firm produces

11、$10 million worth of final goodsbut only sells $9 million worth.Does this violate the expenditure = output identity?Why output = expenditureUnsold output goes into inventory, and is counted as “inventory investment”whether the inventory buildup was intentional or not. In effect, we are assuming that

12、 firms purchase their unsold output. GDP: An important and versatile conceptWe have now seen that GDP measurestotal etotal outputtotal expenditurethe sum of value-added at all stages in the production of final goodsGNP vs. GDPGross National Product (GNP): total e earned by the nations factors of pro

13、duction, regardless of where locatedGross Domestic Product (GDP):total e earned by domestically-located factors of production, regardless of nationality.(GNP GDP) = (factor payments from abroad) (factor payments to abroad)Discussion Question:In your country, which would you want to be bigger, GDP or

14、 GNP? Why?(GNP GDP) as a percentage of GDP for selected countries, 1997.(GNP GDP) as a percentage of GDP for selected countries, 1997.Real vs. Nominal GDPGDP is the value of all final goods and services produced. Nominal GDP measures these values using current prices. Real GDP measure these values u

15、sing the prices of a base year. Real GDP controls for inflationChanges in nominal GDP can be due to:changes in prices changes in quantities of output producedChanges in real GDP can only be due to changes in quantities,because real GDP is constructed using constant base-year prices. Practice problem

16、, part 1Compute nominal GDP in each yearCompute real GDP in each year using 2001 as the base year.200120022003PQPQPQgood A$30900$311,000$361,050good B$100192$102200$100205Answers to practice problem, part 1Nominal GDP multiply Ps & Qs from same year2001: $46,200 = $30 900 + $100 192 2002: $51,400 20

17、03: $58,300Real GDP multiply each years Qs by 2001 Ps2001: $46,3002002: $50,000 2003: $52,000 = $30 1050 + $100 205U.S. Real & Nominal GDP, 1967-2001GDP DeflatorThe inflation rate is the percentage increase in the overall level of prices.One measure of the price level is the GDP Deflator, defined as

18、Practice problem, part 2Use your previous answers to compute the GDP deflator in each year. Use GDP deflator to compute the inflation rate from 2001 to 2002, and from 2002 to 2003. Nom. GDPReal GDPGDP deflatorinflationrate2001$46,200$46,200n.a.200251,40050,000200358,30052,000Answers to practice prob

19、lem, part 2Nom. GDPReal GDPGDP deflatorinflationrate2001$46,200$46,200100.0n.a.200251,40050,000102.82.8%200358,30052,000112.19.1%Understanding the GDP deflatorExample with 3 goods For good i = 1, 2, 3Pit = the market price of good i in month tQit = the quantity of good i produced in month tNGDPt = N

20、ominal GDP in month tRGDPt = Real GDP in month tUnderstanding the GDP deflatorThe GDP deflator is a weighted average of prices. The weight on each price reflects that goods relative importance in GDP. Note that the weights change over time.Working with percentage changesEX:If your hourly wage rises

21、5% and you work 7% more hours, then your wage e rises approximately 12%.USEFUL TRICK #1 For any variables X and Y, the percentage change in (X Y ) the percentage change in X + the percentage change in YWorking with percentage changesEX: GDP deflator = 100 NGDP/RGDP.If NGDP rises 9% and RGDP rises 4%

22、, then the inflation rate is approximately 5%.USEFUL TRICK #2the percentage change in (X/Y ) the percentage change in X the percentage change in YChain-weighted Real GDPOver time, relative prices change, so the base year should be updated periodically.In essence, “chain-weighted Real GDP” updates th

23、e base year every year. This makes chain-weighted GDP more accurate than constant-price GDP.But the two measures are highly correlated, and constant-price real GDP is easier to computeso well usually use constant-price real GDP. Consumer Price Index (CPI)A measure of the overall level of prices Publ

24、ished by the Bureau of Labor Statistics (BLS) Used to track changes in the typical households cost of livingadjust many contracts for inflation (i.e. “COLAs”)allow comparisons of dollar figures from different yearsHow the BLS constructs the CPISurvey consumers to determine composition of the typical

25、 consumers “basket” of goods.Every month, collect data on prices of all items in the basket; compute cost of basketCPI in any month equalsExercise: Compute the CPIThe basket contains 20 pizzas and 10 compact discs. prices:pizzaCDs2000$10$152001$11$152002$12$162003$13$15For each year, computethe cost

26、 of the basketthe CPI (use 2000 as the base year)the inflation rate from the preceding yearcost of inflationbasket CPI rate2000$350100.0n.a.2001 370105.75.7%2002 400114.38.1%2003 410117.12.5%answers:The composition of the CPIs “basket”Understanding the CPIExample with 3 goods For good i = 1, 2, 3Ci

27、= the amount of good i in the CPIs basketPit = the price of good i in month tEt = the cost of the CPI basket in month tEb = cost of the basket in the base periodUnderstanding the CPIThe CPI is a weighted average of prices. The weight on each price reflects that goods relative importance in the CPIs

28、basket. Note that the weights remain fixed over time.Reasons why the CPI may overstate inflationSubstitution bias: The CPI uses fixed weights, so it cannot reflect consumers ability to substitute toward goods whose relative prices have fallen.Introduction of new goods: The introduction of new goods

29、makes consumers better off and, in effect, increases the real value of the dollar. But it does not reduce the CPI, because the CPI uses fixed weights.Unmeasured changes in quality: Quality improvements increase the value of the dollar, but are often not fully measured. The CPIs biasThe Boskin Panels

30、 “best estimate”:The CPI overstates the true increase in the cost of living by 1.1% per year.Result: the BLS has refined the way it calculates the CPI to reduce the bias.It is now believed that the CPIs bias is slightly less than 1% per year. Discussion topic:If your grandmother receives Social Secu

31、rity, how is she affected by the CPIs bias?Where does the government get the money to pay COLAs to Social Security recipients?If you pay e taxes and Social Security taxes, how does the CPIs bias affect you?Is the government giving your grandmother too big of a COLA?How does your grandmothers “basket

32、” differ from the CPIs? CPI vs. GDP deflatorprices of capital goodsincluded in GDP deflator (if produced domestically)excluded from CPIprices of imported consumer goodsincluded in CPIexcluded from GDP deflatorthe basket of goodsCPI: fixedGDP deflator: changes every yearTwo measures of inflation16 14

33、 12 10 8 6 4 2 0 -2Percentagechange194819531958196319681973Year19781983198819931998CPIGDP deflatorCategories of the populationemployed working at a paid job unemployed not employed but looking for a job labor force the amount of labor available for producing goods and services; all employed plus une

34、mployed persons not in the labor force not employed, not looking for work. Two important labor force conceptsunemployment rate percentage of the labor force that is unemployedlabor force participation rate the fraction of the adult population that participates in the labor forceExercise: Compute lab

35、or force statisticsU.S. adult population by group, April 2002Number employed = 134.0 millionNumber unemployed = 8.6 millionAdult population = 213.5 millionUse the above data to calculatethe labor forcethe number of people not in the labor forcethe labor force participation ratethe unemployment rate

36、Answers:data: E = 134.0, U = 8.6, POP = 213.5labor forceL = E +U = 134.0 + 8.6 = 142.6not in labor forceNILF = POP L = 213.5 142.6 = 70.9unemployment rateU/L = 8.6/142.6 = 0.06 or 6.0%labor force participation rateL/POP = 142.6/213.5 = 0.668 or 68.8%Exercise: Compute percentage changes in labor force statisticsSuppose the population increases by 1%the labor force increases by 3%the number of unemployed persons increases by 2%Compute the percentage changes in the labor force participation ra