ECON-2120 Lecture Notes - Lecture 1: Industrial Revolution, Longrun, Great Moderation
Document Summary
If the growth rates of a macroeconomic variable are positively (negatively) correlated with the deviations from trend on real gdp, then that variable is procyclical (countercyclical). Investments move much more than consumption: net exports: the value of the exports minus the value of the imports, both are positively correlated with gdp. Imports tend to be more strongly correlated: problems with gdp as a measure of, production: there are some aspects of production that are not accounted for by. Babysitting, illegal activities, other off-the-book transactions): gdp does not count non-priced production, occurs when goods and services are produced but no explicit payment is made (ex. Children doing chores): problems with gdp as a measure of welfare: It can be hard to compare incomes across countries. India: gdp in india was 4x higher in 2010 than 1970, with an average growth rate of real per capita gdp of about 3. 5% If india grew at the long-run rate of the us economy (2%),
