ECON 4423 Lecture 8: Notes 8- BOP basics
27 Oct 2018
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The basics of national-income accounting and balance-of-payments accounting. *understanding how economies are linked together at the macroeconomic level. Us consumption rose fast (and savings fell) relative to gdp. Massive net foreign purchase of us assets (net capital in ows) Maybe it"s cyclical (note how us de cit falls during recessions - why?) National income accounts: a measurement of macroeconomic activity. Gne(gross national expenditure): the sum of all expenditures on nal goods and services in an economy in a calendar year. Gdp(gross domestic product): the value of all nal goods and services produced by home rms. Gdp = all domestic sales - business purchases of intermediate inputs. Gni(gross national income): sum of payments made to all domestic factors of production (labor, capital, land) as income. Gni = total value added in the economy, but this income is what goes back to expenditure in gne. = total national resources available for expenditure from income.
