welcome to class of economic forces by dr. satyendra singh university of winnipeg canada
TRANSCRIPT
Dimensions of the Economy… Important Economic Indicators
Gross National Income (GNI) GNI/capita Purchasing Power Parity Income Distribution Private consumption Unit labor costs Exchange rates Inflation rates Interest rates Balance of payment (BOP)
Dimensions of the Economy
• Gross National Income (GNI)– The measure of the income generated by a nation’s
residents from international and domestic activity– Preferred over GDP
• GNI/Capita– Used to compare countries with respect to the well-being
of their citizens and to assess market or investment potential
Kinds of Economy…
• Formal economy– Visible, Recorded, Audited– What % of GDP is owned by government
• UK: 10% 4%• China: 80% 50%• Chie: 75% 25%• Mexico: 66% 33%
Why Privatize?• To get $ from firms• Increase firm profitability• Ideological reasons• Preserve jobs• …
• Unfair because government firms– ↓ price unfairly– ↓ financing rate– ↑Get government contract– Expert assistance– ↓ wages– ↑ Has more resources
Characteristics of Economy
• Developed countries spend twice on – Food– Clothing– …
• Developing countries spend twice on– Transportation– White goods– Healthcare– Wine/ cigarette
Wal*Mart Economy
• $+450b sales• 4000 stores• 30 countries• Only 40 countries (out of 227) above Wal*Mart
• Ghana $40b (ppp 80b)• Manitoba $50b
Economic development Measurement (GNI/Capita), World Bank
• Low Income (<$1000)• Mower middle income ($1000-$3000• Upper middle income ($3000-$9000)• Higher income (>$10000)
• Canada $40,000• India $4,000• China $9,000• Ghana $3,000
Levels of Economic Development• Developed– Nations that are the most technically developed
• Newly industrialized economies (NIEs)– The fast-growing upper MIG and HIG economies such as Taiwan, Hong Kong, and Singapore
• Newly industrializing countries (NICs)– Brazil, Mexico, Malaysia, Chile and Thailand
• Developing – Nations that are less technically developed
• Emerging Markets– Transformation from controlled to market economy
Purchasing Power Parity (PPP)…
– The number of units of a currency required to buy the same amount of goods and services in a domestic market that $1.00 would buy in the U.S.
– Helps to make comparisons possible across economies
CIA Fact Book