1. Lecture 2 The Data of Macroeconomics, Macroeconomic Accounts 1 1.Measuring the Value of Economic Activity: GDP 2.Measuring the Cost of Living: The CPI 3.Measuring Joblessness: The Unemployment rate

2. Lecture 2 The Data of Macroeconomics Macroeconomic Accounts 2 Why GDP is important?

3. 3 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

4. 4

5. 5 Flow variables: GDP, income, expenditure, # of people losing their jobs, budget deficit Stock: variables: wealth, # of unemployed people, government debt, international reserves

6. 6 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts Rules for Computing GDP The treatment of inventories Adding different types of goods Used goods Intermediate goods and value added Imputation

7. 7 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts Real and nominal GDP The GDP deflator Chain-weighted measures of real GDP

8. 8 Euro area: annual rates of growth Nominal GDPReal GDPGDP deflator 19972.22.6-0.4 19983.92.91.0 19994.63.11.5 20005.24.01.3 20014.32.02.4 20023.50.92.6 20032.90.82.1 20044.02.11.9 20053.41.51.9 20064.62.81.8 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

9. 9 The Components of Expenditure Y = C + I + G + NX Output i.e. GDP (Y) Consumption (C) Investment (I) Government purchases (G) Net exports (NX)

10. 10 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts Components of GDP (1999-2006, % of GDP) Consumption (C)Investment (I)Government purchases (G) Australia58.325.218.1 Germany58.918.619.0 France56.319.823.4 UK64.717.720.5 Italy59.220.719.5 Japan57.024.017.6 Canada56.020.619.2 Switzerland60.322.011.5 USA69.719.515.4 Euro Area57.120.920.3

11. 11 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

12. 12 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

13. 13 Personal disposable income Personal income National income NDP GDP C Indirect taxes Depreciation I G X-Z GDP and Its Components Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

14. 14 Other Measures of Income  Gross National Product  Net National Product  National Income  Personal Income  Disposable Personal Income Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

15. 15 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts Inflation  The Consumer Price Index  The GDP Deflator

16. 16 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

17. 17 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts The Unemployment Rate Employed Unemployed Labor Force Unemployment Rate Labor Force Participation Rate

18. 18 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

19. 19 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts

20. 20 Lecture 2 The Data of Macroeconomics Macroeconomic Accounts From Economic Statistics to Economic Models