National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic.

Slides:



Advertisements
Similar presentations
The Measurement of Income and Prices Instructor: MELTEM INCE
Advertisements

SESSION 11: MACROECONOMIC INDICATORS: GDP, CPI, AND THE UNEMPLOYMENT RATE Talking Points Macroeconomic Indicators: GDP, CPI, and the Unemployment Rate.
Macroeconomic.
Chapter Two 1 A PowerPoint  Tutorial to Accompany macroeconomics, 5th ed. N. Gregory Mankiw Mannig J. Simidian ® CHAPTER TWO The Data of Macroeconomics.
Lesson 6-1 Measuring Total Output and Income. Measuring Total Output Gross Domestic Product (GDP) is a number that measures the total output of a country.
Gross Domestic Product
Economics 202 Principles Of Macroeconomics
Chapter 2: The Data of Macroeconomics
Measuring a Nation’s Income
Outline 1.Measurement of GDP 2.Savings, wealth and capital 3.Nominal and real GDP and price indices 4.Labor market measurement.
MEASURING AGGREGATE ECONOMIC ACTIVITY
MEASURING GDP AND ECONOMIC GROWTH
Circular Flow. The Government’s Role Imperfect Information Externalities Public Goods Lack of Competition Business Cycles Correct for:
Chapter 2 The Measurement and Structure of the Canadian Economy Economics 282 University of Alberta.
5 PART 2 GDP and the Standard of Living MONITORING THE MACROECONOMY
Gross Domestic Product (GDP) The sum of the flow of all final economic goods and services produced by the domestic economy during a relevant period of.
Measuring GDP and Economic Growth
National Income Accounting
GDP and the CPI: Tracking the Macroeconomy
Measuring the Aggregate Economy
10 Measuring GDP and Economic Growth CHAPTER
C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to Define GDP and explain why the value of production,
Chapter 5 - Summary for Spring, 2015
Of 34 Copyright © 2008 Pearson Education Canada 1 Chapter 20 The Measurement of National Income.
Chapter 2 The Measurement and Structure of the Canadian Economy Copyright © 2012 Pearson Education Inc.
 Circular Flow of Income is a simplified model of the economy that shows the flow of money through the economy.
Chapter 2-1.   GDP – is the total dollar value of all final goods and service produced in one country in one year.  Measures the national output (how.
GDP, the National Accounts, and Census Economic Data Brent Moulton March 15, 2007.
Measuring the Economy. The Economy as a Circular Flow Resources FirmsHouseholds Goods and Services Expenditures Income.
© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Economics 9e by Case, Fair and Oster 21 PART IV CONCEPTS AND PROBLEMS IN MACROECONOMICS.
5 CHAPTER Measuring GDP and Economic Growth.
Measuring National Output Chapter 5. Economic goals  Economic growth  Full employment  Low inflation  An economy grows because of increases in available.
© 2008 Pearson Addison-Wesley. All rights reserved 2-1 Chapter Outline National Income Accounting: The Measurement of Production, Income, and Expenditure.
Macroeconomic Aggregates. The Importance of Economic Data For the practicing economists and those who must make economic decisions, measuring the economy.
Gross Domestic Product (GDP) What is Gross Domestic Product and how we measure it? Why is this measure important? What are the definitions of the major.
Taking the Nation’s Economic Pulse
Prepared by: Jamal Husein C H A P T E R 10 © 2005 Prentice Hall Business PublishingSurvey of Economics, 2/eO’Sullivan & Sheffrin Measuring a Nation’s Production.
1 20 C H A P T E R © 2001 Prentice Hall Business PublishingEconomics: Principles and Tools, 2/eO’Sullivan & Sheffrin Measuring a Nation’s Production and.
1 LECTURE 1 The Circular Flow and National Income Accounting.
Begin $100 $200 $300 $400 $500 Which way Does a Supply Curve Shift? Graphs Unemployment GDP Random Which way Does a demand Curve shift?
© 2007 Worth Publishers Essentials of Economics Krugman Wells Olney Prepared by: Fernando & Yvonn Quijano.
Principles of Macroeconomics Lecture 1 INTRODUCTION TO MACROECONOMICS & MEASURING ECONOMIC ACTIVITY.
 A piece of economic data (statistic)  indicates the direction of an economy.
Macroeconomics: Measuring Total Production and Income
Eco 200 – Principles of Macroeconomics Chapter 7: National Income Accounting.
Chapter 5 Fall, 2015 National Income Accounting. Now we study the branch of macroeconomics that examines aggregate performance of all markets in the market.
© 2011 Pearson Education GDP: A Measure of Total Production and Income 5 When you have completed your study of this chapter, you will be able to 1 Define.
Gross Domestic Product and Real GDP. Gross Domestic Product What? What? Where? Where? When? When? How? GDP is a measure of the value of all final goods.
Chapter Two 1 ® CHAPTER 2 The Data of Macroeconomics A PowerPoint  Tutorial To Accompany MACROECONOMICS, 6th. ed. N. Gregory Mankiw By Mannig J. Simidian.
SESSION 8: MACROECONOMIC INDICATORS: GDP, CPI, AND THE UNEMPLOYMENT RATE Talking Points Macroeconomic Indicators: GDP, CPI, and the Unemployment Rate 1.
Chapter 6 National Income Accounting Economics, 7th Edition Boyes/Melvin.
ECONOMIC INDICATORS. The Business Cycle What are economic indicators? Article: identify indicators.
PowerPoint Presentation by Charlie Cook Copyright © 2004 South-Western. All rights reserved. Chapter 21 The Macroeconomic Environment.
GDP and the CPI: Tracking the Macroeconomy Chapter 7 THIRD EDITIONECONOMICS and MACROECONOMICS MACROECONOMICS By Nimantha Manamperi.
1 of 37 chapter: 23 >> Krugman/Wells ©2009  Worth Publishers Tracking the Macroeconomy.
Market for Resources HouseholdsFirms Market for Goods and Services Wages, profits Land, Labor, Capitol Spending Goods And Services.
National Income Concept and Measurement
Economic growth Macroeconomics 1. Fundamental macroeconomic indicators Economic growth Unemployment Inflation 2.
Macroeconomics: Measuring Total Production and Income Chapter 8.
National Income.
Prepared by Anton Ljutic
Section 3.
ECN 200: Introduction to Economics Macroeconomic Aggregates
Business Economics (ECO 341) Fall: 2012 Semester
National Income 9/12/2018 Dr.P.S EAB IV unit.
Measurement of Economic Performance
Gross Domestic Product
Section 3.
National Income.
Presentation transcript:

National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. National accounts broadly present output, expenditure, and income activities of the economic actors (corporations, government, households) in an economy, including their relations with other countries' economies, and their wealth (net worth). They present both flows (measured over a period) and stocks (measured at the end of a period). Nation Account System - What

What and Why There are a number of aggregate measures in the national accounts, notably including gross domestic product or GDP, perhaps the most widely cited measure of aggregate economic activity. Ways of breaking down GDP include as types of income (wages, profits, etc.) or expenditure (consumption, investment/saving, etc.). Measures of these are examples of macro-economic data. Such aggregate measures and their change over time are generally of strongest interest to economic policymakers, although the detailed national accounts contain a rich source of information for economic analysis.

Who The accounts are derived from a wide variety of statistical source data including surveys, administrative and census data, and regulatory data, which are integrated and harmonized in the conceptual framework. They are usually compiled by national statistical offices and/or central banks in each country, though this is not always the case, and may be released on both an annual and (less detailed) quarterly frequency.

What, in depth: GDP Gross domestic product (GDP) refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living. GDP can be determined in three ways, all of which should, in principle, give the same result. They are the product (or output) approach, the income approach, and the expenditure approach

GDP by expediture The expenditure approach works on the principle that all of the product must be bought by somebody, therefore the value of the total product must be equal to people's total expenditures in buying things. GDP = private consumption + gross investment + government spending + (exports − imports), orprivate consumptiongross investment government spendingexportsimports GDP = C + I + G + (X-M)

GDP by income The income approach works on the principle that the incomes of the productive factors ("producers," colloquially) must be equal to the value of their product, and determines GDP by finding the sum of all producers' incomes. This method measures GDP by adding incomes that firms pay households for the factors of production they hire- wages for labour, interest for capital, rent for land and profits for entrepreneurship. The US divide incomes into: Wages, salaries, and supplementary labour income; Corporate profits; Interest and miscellaneous investment income; Farmers’ income; Income from non-farm unincorporated businesses.

GDP by production The production approach sums the outputs of every class of enterprise to arrive at the total. It is also called as Net Product or Value added method. This method consists of three stages: 1.Estimating the Gross Value of domestic Output in various economic activities; 2.Determining the intermediate consumption, i.e., the cost of material, supplies and services used to produce final goods or services; and finally 3.Deducting intermediate consumption from Gross Value to obtain the Net Value of Domestic Output. Gross Value Added = Value of output – Value of Intermediate Consumption Value of Output = Value of the total sales of goods and services + Value of changes in the inventories.

Gross? Domestic? Gross means that GDP measures production regardless of the various uses to which that production can be put. Production can be used for immediate consumption, for investment in new fixed assets or inventories, or for replacing depreciated fixed assets. Domestic means that GDP measures production that takes place within the country's borders

Domestic & National GDP can be contrasted with gross national product (GNP) or gross national income (GNI).gross national productgross national income The difference is that GDP defines its scope according to location, while GNP defines its scope according to ownership. In a global context, world GDP and world GNP are therefore equivalent terms.world GDP and world GNP GDP is product produced within a country's borders; GNP is product produced by enterprises owned by a country's citizens.

Questions? What are the main limitations of GDP? See: html

Unemployment Unemployment (or joblessness), as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labour force. Unemplyment rate = unemployed workers/total labor force

Unemployment rate As defined by the International Labour Organization, "unemployed workers" are those who are currently not working but are willing and able to work for pay, currently available to work, and have actively searched for work.International Labour Organization Individuals who are actively seeking job placement must make the effort to: be in contact with an employer, have job interviews, contact job placement agencies, send out resumes, submit applications, respond to advertisements, or some other means of active job searching within the prior four weeks. Simply looking at advertisements and not responding will not count as actively seeking job placement.

Inflation Inflation is a rise in the general level of prices of goods and services in an economy over a period of time. Inflation is usually estimated by calculating the inflation rate of a price index, usually the Consumer Price Index. The Consumer Price Index measures prices of a selection of goods and services purchased by a "typical consumer”. The inflation rate is the percentage rate of change of a price index over time. CPI t = (Pt-P0)/P0 * 100

Inflation Other widely used price indices for calculating price inflation include the following: Producer price indices (PPIs) which measures average changes in prices received by domestic producers for their output. Commodity price indices, which measure the price of a selection of commodities. In the present commodity price indices are weighted by the relative importance of the components to the "all in" cost of an employee. Core price indices: because food and oil prices can change quickly due to changes in supply and demand conditions in the food and oil markets, it can be difficult to detect the long run trend in price levels when those prices are included. Therefore most statistical agencies also report a measure of 'core inflation', which removes the most volatile components (such as food and oil) from a broad price index like the CPI. GDP deflator is a measure of the price of all the goods and services included in gross domestic product (GDP). It is: nominal GDP measure divided by its real GDP measure.

Balance of Trade The balance of trade (or net exports) is the difference between the monetary value of exports and imports of output in an economy over a certain period. It is the relationship between a nation's imports and exports. A positive balance is known as a trade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap. The balance of trade is sometimes divided into a goods and a services balance.

World Balance of Trade

Questions? Is the Italian balane of trade in surplus or deficit? What are the main reasons of that surplus/deficit (geographical and sector analysis)?

FDI Foreign direct investment (FDI) refers to the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It usually involves participation in management, joint- venture, transfer of technology and expertise. There are two types of FDI: inward foreign direct investment outward foreign direct investment.. resulting in a net FDI inflow (positive or negative) and "stock of foreign direct investment", which is the cumulative number for a given period.