Econmics presentation

Economics James Boggan and Cillian Flynn

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GDP• Gross Domestic Product

(GDP).

• Used to measure the health of a countries economy.

• The total market value of all final goods and services produced in a country equal to the total consumer investment and government spending plus the value of exports minus the value of inputs

• Irelands GDP (2012) 210.4 Billion

(www.cliffsnotes.com

(www.investorwords.com)

Real GDP

• Real GDP otherwise known as the current GDP is the measurement of economic output of a country minus the effect of inflation.

• This give a more accurate account of the economies production per quarter.

• Real GDP is what nominal GDP would have been if there was no price changes from base year.

• Real GDP takes into account inflation.

(www.useconomy.about.com)

GNP

• GNP (Gross National product)

• GNP is the total value of goods and services produced in a country in a particular year, plus income earned by its citizens including income of those living abroad, minus income of non residents in that country.

• Consumption + Government Expenditures + Investments + Exports + Foreign Production by National Companies – Domestic Production by Foreign Companies = Gross National Product

(www.investorwords/2186/GNP.html)

GDP per capita

It’s an estimation of the value of goods produced per person in the country equal to the countries GDP

divided by the total population of the country.

For Example….

Irelands GDP per capita in 2012 is $42,600

This helps you compare countries at a smaller scale judging it by people rather than the country as a

whole

Net Factor Income

• Used to differentiate national income from domestic income

• The difference between GDP and GNP

• Net factor income in Ireland is negative due to large profit repatriations by multinationals

(readyratios.com)

Limitations of using GDP as a way of judging an

economies wealth

Foreign Direct Investment

• FDI (foreign direct investment)

• There are 1,033 foreign companies in Ireland

• Google, Dell and Microsoft are some examples

• The money earned by these companies will most likely leave Ireland

• Artificially high GDP

(www.idaireland.com)

Errors and Omissions

• Errors in calculations

• Black market

• Trade by barter

• Self sufficient

(ingrimayne.com) (news.bbc.co.uk)

Disasters

• Disasters (war) (natural disasters)

• Disaster related mortality is a growing economic concern in the Asian countries. These deaths are hypothesized to have a significant impact on per capita gross domestic Product (GDP) of the countries.

• Gross investment and life expectancy on economic growth of Pakistan, while there is a negative impact of arable land, net exports and labor force on GdP per capita.

• Example: Earthquake in Pakistan in October 2005.

Ignores Income Distribution

• HDI (Human Development Index)

• A small amount of people in a country own all of the wealth (eg. Qatar)

Different countries have different needs

•Where countries spend their money

•Israel spend a lot of money on weapons and security

•Germany spend money on infrasture, health systems, etc.

http://portfolio-germany.com/content/why-germany

http://flattauassociates.com/blog/crystal-ball-obama-netanyahu-and-the-israeli-palestinian-conflict/

Longer working weeks and less holidays

• Impact of longer working weeks and less holidays

• GDP can rise due to people working longer hours and less time off as this is good for the economy but not necessarily good for the workers as they wouldn't be as happy

• Standard of living and quality of life

(www.businessnewsdaily.com)

The Black Economy And Non-Monetised

SectorsGDP figures might understate the true living standards because of the existence and growth of the black economy. The black economy includes economic

activity that goes unrecorded by the Inland Revenue and Customs & Excise. The non-monetised sectors of the economy include output that is not sold at

market prices but involves barter trade, and self-consumed products.

• The Economist's latest estimates for the total value of the black economy throughout the world is $9 trillion. The scale of the underground economy is estimated to average 15% of national output for rich economies and 33% of national output for emerging economies.

• Fuel tobacco digital entertainment and drugs.

2012 Ireland

UK USA Canada African country

Asian country

EasternEuropean

$ Nigeria China Poland

GDP 210.4Billion

2.441Trillion

15.68Trillion

1.819Trillion

268.7Billion

8.227Trillion

487.7Billion

GDP per capita

42,600

37,500

50,700 43,400 2,800 9,300 20,900

GDP growth rate

-1.20 1.30 1.60 1.40 6.18 7.50 0.80

Unemployment (%)

13.3 7.7 7.3 6.9 23.9 4.1 13

Inflation (%)

0.2 2.7 1.5 1.1 8.2 3.1 1

UN HDI Ranking

7 26 3 11 153 101 39

References

www.investorwords.com/2153/GDP.html

www.cliffsnotes.com/cliffsnotes/economics/what-are-the-advantages-and-disadvantages-of-gross-domestic-product

www.useconomy.about.com/od/grossdomesticproduct/p/Real-GDP.html

www.investorwords/2186/GNP.html

http://www.idaireland.com

References

http://www.businessnewsdaily.com/2620-unhappy-employee-risk.html

www.readyratios.com

http://portfolio-germany.com/content/why-germany

http://flattauassociates.com/blog/crystal-ball-obama-netanyahu-and-the-israeli-palestinian-conflict/

http://ingrimayne.com/econ/Measuring/GNP2.html