Endogenous variables are the variables that a model seeks to explain, and exogenous variables are the variables that a model treats as given. The purpose of the model is to show how exogenous variables affect endogenous variables. As shown in Figure 1-4, exogenous variables come from outside the model and endogenous variables are determined within the model and are the output of the model.
Keynesian economics emphasizes:
GDP accounting:
China splits government spending into consumption and investment, so consumption, investment, and net exports are the trio that drive GDP.
Two sectors: households (consumption sector), firms (production sector)
Three sectors: households, firms, government
Four sectors: households, firms, government, foreign
Income perspective:
Expenditure perspective:
G Government purchasing expenditures excluding government transfers are after excluding transfers. spending.
Gao Hongye:
Gross National Income (GDP) by the income approach = Wages + Interest + Corporate Profits + Rents + Indirect Taxes and Corporate Transfers + Depreciation + Statistical Errors
Net Domestic Production (NDP) = GDP - Depreciation
National Income (NI) = NDP - Indirect Taxes - Corporate Transfers + Govt Grants = Wages + Interest + Corporate Profits + Rent + Government Grants
Personal Income (PI) = Wages + Interest + Corporate Profits + Rent + Government Grants
Mancunian:
National Income (NI) = Employee Compensation + Owner's Income + Rental Income + Corporate Profits + Net Interest + Taxes on Production and Imports
Personal Income (PI) = National Income -Production and Import Taxes -Company Profits -Social Security Contributions -Net Interest + Dividends + Government Transfers to Individuals + Personal Interest Income
=Employee Compensation + Owner's Income + Rental Income + Dividends + Government Transfers to Individuals + Personal Interest Income
Remuneration of Laborers : refers to all remuneration received by a laborer for his/her productive activities.
Remuneration of laborers : refers to all the remuneration received by laborers for engaging in productive activities. Includes all forms of wages, bonuses and allowances received by workers, both in monetary and in-kind forms; also includes public medical and medical and health expenses, transportation allowances for commuting to and from work, and social insurance premiums paid by the unit, which are enjoyed by workers. For the individual economy, it is not easy to distinguish between the labor remuneration received by its owners and the operating profit, and these two parts are treated uniformly as workers' remuneration.
Contributed by Leontief
Starting from an input-output table, assume that the inputs and outputs of each sector of production maintain a fixed ratio (i.e., the "input-output coefficient"). Assuming that the sector produces a quantity of product that requires a quantity of inputs from the sector, the input-output coefficient is
For the Rigobert J. Leontief production function
Equation of the input-output model:
Money supply
Cash in circulation (M0) = The sum of cash owned by businesses and individuals outside the entire banking system
Narrow money (M1) = M0 + business demand deposits
Broad money (M2) = M1 + quasi-money (time deposits + residents' savings deposits + other deposits)
The reasons for the increase in M1: 1. bank lending 2. exports
Gross National Product (GNP) vs. Gross National Product (GNP) vs Gross Domestic Product (GDP)
GDP :The sum of the value of final goods and services produced and sold by all factors of production within a country's territory over a given period of time, including the output of both domestic and foreign firms, as well as that of foreign firms investing in the country (FDI)
GNP : the value of final goods and services produced by all factors of production within a country's territory and sold during a given period of time. strong> GNP: the sum of the value of final goods and services produced and sold by all factors of production of a country's nationals in a certain period of time, including only the output of nationals invested in their own country and abroad, excluding the output of foreign investment in the country.
A price index that measures the extent to which the aggregate level of prices of final goods and services produced in a country changes over time. In addition to consumer goods and services, it includes changes in the prices of capital goods and imported and exported goods, and can reflect trends in the general price level.
Rate of inflation
The ratio of the excess of money issued to the amount of money actually needed
The rate of increase in the price level, usually reflected in the degree of inflation by the Consumer Price Index (CPI)
Consumer Price Index (CPI).
Here the process of a family buying stocks with money - the stock increases in price - and the family receives interest is simply common sense investment, a common sense social concept. Macroeconomics investment simply represents the process by which money flows through various channels to a business and then is used by the business to purchase factors of production such as equipment. The above process should be dismantled according to macroeconomics as households save their income in the stock market and firms obtain funds through the stock market and use the funds to invest in factors of production and thus earn interest. The interest earned by households in the future comes from savings, not investment.
In macroeconomics, income is a physical concept, not a monetary one. We can refer to what is now called "Gross Domestic Product" (GDP) as total output, or total income, or total expenditure. This is a difference in perspective, but they all refer to physical goods. For example, the sum of 1 ton of paddy, 1 ton of steel, 100 computers, and 10 haircut services, which is the output of the entire economy, is also income and expenditure. All of this output in physical form is necessarily consumed from the point of view of expenditure: it can be consumed, it can be used for export, it can be used for investment, and from the point of view of expenditure, there is no concept of savings, even if what is placed in a warehouse exists as an investment in the form of inventory, not savings. Therefore, GDP = Final Consumption Expenditure, Gross Capital Formation, Net Exports (some textbooks list government purchases as a separate category, which distinguishes between government behavior and private behavior; in fact, government purchases can be included in all three of the above).
Savings This concept is not defined from an expenditure perspective, but rather from an intertemporal perspective; any output that is not consumed in the current period is savings. Savings is also a physical concept. Thus, output = income = expenditure = consumption + savings.
Nominal GDP vs real GDP:
Nominal GDP is nominal price * output, higher nominal price does not indicate economic growth, only higher output is economic growth, to remove the effect of price, use real GDP = nominal GDP/GDP deflator, what determines nominal price?
On the calculation of GDP
GDP=400 (Consumption: 250+Investment: 150)
National Savings=Private Savings+Public*** Savings=(Y-T-C)+(T-G)=Y-C-G
Investment and Savings
Taking a loan from a bank to buy a new house: investment
Taking a loan from a bank to buy a car for your own use:
Taking a loan from a bank to buy a car for delivery: investment
Earning $100 to deposit in the bank or buy stocks: savings