chapter twenty: macroeconomic measurement: the current approach
TRANSCRIPT
Chapter Twenty:
Macroeconomic Measurement:The Current Approach
An Overview of National Accounting
Type of Capital
Value in Trillions of Dollars at the End of the
YearEquipment and software (businesses and government) 7.0Structures (businesses and government) 21.5Residences 17.6Inventories 2.2Consumer durable goods 4.7Total Value of Manufactured Capital 53.0
Table 20.1: The Estimated Size of U.S. Manufactured Capital Stock, 2011
Sources: BEA, Fixed Asset Accounts Table 1.1 and NIPA Table 5.9, and authors’ calculations
Measuring Gross Domestic Product
Sector and SubsectorProduction by
Sector (trillions of dollars)
Production by Subsector (trillions
of dollars)
Households and institutions production 1.93
Private households 1.07
Nonprofit institutions 0.86
Business production 11.87
Government production 1.87
Federal government 0.62
State and local governments
1.26
Total: Gross domestic product 15.68
Table 20.2: Gross Domestic Product, Product Approach, 2012
Source: BEA, NIPA Table 1.3.5, published 1/30/2013.Note: Totals may not add up exactly due to rounding.
Table 20.3: Gross Domestic Product, Spending Approach, 2012
Sector and Type of SpendingSpending by Sector (trillions of dollars)
Spending by Type (trillions of dollars)
Household and institutions spending
11.12 (personal consumption expenditures)
Durable goods 1.22
Nondurable goods 2.56
Services 7.34
Business spending
2.06 (gross private domestic investment)
Fixed investment 2.00
Change in private inventories 0.06
Net foreign sector spending
-0.57 (net exports of goods and services)
Exports 2.18
Less: Imports 2.75
Government spending
3.07 (government consumption expenditures and gross investment)
Federal 1.21
State and local 1.85
Total: Gross domestic product 15.68
Source: BEA, NIPA Table 1.1.5, published 1/30/2013Note: Totals may not add up exactly due to rounding.
Table 20.4: Gross Domestic Product, Income Approach, 2011
Types of Income and AdjustmentsIncome and Adjustments
(trillions of dollars)
National income 13.36
Less: Net income receipts from the rest of the world 0.25
Plus: Depreciation (consumption of fixed capital) 1.94
Plus: Statistical discrepancy 0.03
Total: Gross domestic product 15.08
Source: BEA, NIPA, Table 1.7.5, published 1/30/2013, and authors’ calculations
Growth, Price Changes, and Real GDP
(1) (2) (3) (4)
DescriptionPrice per Pound
Quantity (Pounds)
Contribution to Nominal GDP [column (2) × column (3)]
Year 1
Apples $1.00 100 $100
Oranges $2.00 50 $100
$200
Year 2
Apples $1.50 100 $150
Oranges $2.00 75 $150
$300
Table 20.5: Calculation of Nominal GDP in an “Apples-and-Oranges” Economy
Table 20.6: Calculation of Constant-Dollar Real GDP
(1) (2) (3) (4)
DescriptionPrice per Pound
in Base YearQuantity (Pounds)
Contribution to Real GDP [column (2) × column (3)]
Year 1 (Base)
Apples $1.00 100 $100
Oranges $2.00 50 $100
$200
Year 2
Apples $1.00 100 $100
Oranges $2.00 75 $150
$250
Nominal GDP
Figure 20.1 Real versus Nominal GDP, Chained 2005 Dollars, 1980–2012
Source: BEA NIPA Tables 1.1.5 and 1.1.6, published 1/30/2013
Table 20.7: Calculation of a Constant-Weight Price Index
(1) (2) (3) (4)
DescriptionPrice per
PoundQuantity in Base Year
Sum of (Prices × Base Quantities) [column (2) × column (3)]
Year 1
Apples $1.00 100 $100
Oranges $2.00 50 $100
$200
Year 2
Apples $1.50 100 $150
Oranges $2.00 50 $100
$250
Appendix: Chained Dollar Real GDP
Type of Measure Year 1 Year 2
Nominal GDP $200 $300
Fisher quantity index(current to previous year)
——— 1.225
Chain-type quantity index 100100 ×1.225
= 122.5
Real GDP (chained Year 1 dollars) (122.5 $200)/100
= $200 = $245
Table 20.8: Deriving GDP in Chained (Year 1) Dollars