141009R first summarized and advance-posted on FB Summarized from Greg Mankiw’s Principles of Economics PART 8 The Data of Macroeconomics Chapter 23 of 36 – Measuring A Nation’s Income … section 10 … completed first summary edit of this new section today, will re-edit and re-post in sequence later … Table 2 here again Nominal GDP reflects • quantities of goods and services the economy is producing • prices of those goods and services Real GDP reflects only the quantities produced, by holding prices constant at a base year level. We can compute a third measure • GDP deflator • which reflects only the prices of goods and services GDP deflator calculation: GDP deflator = (nominal GDP ÷ real GDP) x 100 Nominal GDP and real GDP • must be the same in the base year • so, the GDP deflator for the base year always equals 100 The GDP deflator for subsequent years after the base year • measures the change in nominal GOP from the base year • not attributable to a change in real GDP The GDP deflator measures • the current year level of prices • relative to the level of prices in the base year Consider the case#1 • the quantities produced in the economy rise over time • but prices remain the same • here, both nominal GDP and real GDP rise together • so the GDP deflator is constant Consider the case#2 • the quantities produced in the economy remain the same over time • but prices rise • here, nominal GDP rises but real GDP remains the same • so the GDP deflator also rises In both cases, the GDP deflator shows whats happening to prices, not quantities. In Table 2 “Calculating the GDP Deflator” section • year 2008, nominal GDP is $200, real GDP is $200, so the GDP deflator is 100 • year 2009, nominal GDP is $600, real GDP is $350, GDP deflator is 171 • year 2010, nominal GDP is $1200, real GDP is $500, GDP deflator is 240 “Inflation” • is a term economists use to describe a situation • in which the economys overall price level is rising The inflation rate • is the price level percentage change • from one period to the next Using these abbreviations for the following equation: IR2 means inflation rate in year 2 GDPD2 means GDP deflator in year 2 GDPD1 means GDP deflator in year 1 The inflation rate between two years is computed IR2 = ((GDPD2 - GDPD1) ÷ GDPD1) x 100 Inflation rate for year 2009 = (171 – 100) ÷ 100 = 71% Inflation rate for year 2010 = (240 - 171) ÷ 171 = 40% The GDP deflator is so named because • it takes inflation out of nominal GDP • so, it deflates nominal GDP for the amount of increase due to price increase … the gross domestic product deflator shows whats happening to prices 国内総生産 デフレーター は、価格 に 何 が 起こって いる の か を 示して kokunaisōseisan defurētā wa, kakaku ni nani ga okotte iru no ka o shimeshite こくないそうせいさん デフレーター は、かかく に なん が おこって いる の か を しめして デフレーター … defurētā … deflator 何が起こっている … なんがおこっている … what’s going on
Posted on: Thu, 09 Oct 2014 10:50:01 +0000
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