Calculation of national statistics dse
Difference between nominal and real GDP
Nominal GDP = current year price level*real output
Real GDP = base year price level x real output
Real GDP = Nominal GDP x Price level in base year / Price level in current year
% change in GDPn = % change in GDPr + % change in P
Per capital GDP
Per capita GDPn = GDPn / Total population
Per capita GDPr = GDPr / Total population
% change in Per capital GDPn/r = % change in GDPn/r – % change in total population
Full employment GDP
It is the GDP when an economy useu all of iqts resources efficiently.
Uses of national income statistics
Assess the economic performance of an economy or an industry
Reflect the economic welfare of an economy
Facilitate international comparison
Limitations of national income statistics
- When GDP consist of a large proportion of investment and exports, GDP may overestimate the standard of living
- The value of some unpaid services is not counted, GDP may underestimate the standard of living.
- The value of leisure is not counted, GDP cannot reflect the actual standard of living when leisure increases/decreases.
- GDP may overestimate the standard of living since undesirable effects of production are not considered.
- Since the distribution of income is not reflected in GDP, if the income distribution is rather uneven, GDP may overestimate the standard of living.
Price index indicating the price level
Consumer price index (CPI)
It is a figure that shows the price level of consumer goods and services purchased by domestic households in a specific period relative to the base year price level.
CPI(A), CPI(B) and CPI(C) reflect the price levels of products generally purchased by domestic households in the lower, medium and higher expenditure ranges.
The composite CPI reflects the price level of products generally purchased by the above households.
It is a figure that shows the price level of goods and services related to GDP in a specific period relative to the base year price level.
GDP deflator = Nominal GDP / Real GDP x 100
Differences between CPI and GDP deflator
Only consumer goods and services purchased by domestic households
Both consumer and producer goods and services related to GDP
Can better reflect the cost of living
Can better reflect the price level and the purchasing power of money
Updated every 5 years in fixed weights
Updated every year in variable weights
DSE Econ 文章系列
- 經濟表現的量度 Measure of economic performance
- 國民收入決定及價格水平 National income determination and price level
- 貨幣與銀行 Money and Banking
- 宏觀經濟問題和政策 Macroeconomic Problems and policies
- 國際貿易和金融 International Trade and Finance