ECON1102 Macroeconomics 代写

  • 100%原创包过,高质代写&免费提供Turnitin报告--24小时客服QQ&微信：120591129

    • ECON1102 Macroeconomics 代写
    ECON1102 Macroeconomics 
    —Structure of the Course
    üMacroeconomic goals – how do we know when an economy is performing well?
    üMeasuring the economy:
    ­Output and prices
    ­Labour market
    ­Balance of Payments
    üThe economy in the short run:
    ­The Business Cycle, stabilisation policies (Fiscal, Monetary), inflation, exchange rates
    üThe economy in the long run:
    ­How to achieve economic growth
    üWhat have we learnt about the theory and practice of macroeconomics?
    —Microeconomics
    and Macroeconomics
    —Macroeconomics deals with the economy as 
    a whole, or with the basic subdivisions or aggregates that make up the economy
    ◦An aggregate is a collection of specific economic
    units that are treated as if they were one unit
    —Microeconomics is concerned with specific economic units and a detailed consideration
    of the behaviour of these individuals units
    —
    —Fallacy of Composition
    —Fallacy of composition: the idea that the whole is different from the sum of the parts, or, that what is true for the individual is not true for the whole.
    —Important justification for the study of macroeconomics

    —Macroeconomic theory is essentially different from
       microeconomics, cannot move easily form one to another
    —Example: Paradox of Thrift
    UNIT 1: Introduction to Macroeconomics & Measuring the Economy            
    1.Macroeconomic Goals
    2.Measuring Output (GDP)
    3.Measuring Prices and Inflation(CPI)
    ●  Principles of Macroeconomics, 4nd Edition
      by Bernanke, Olekalns and Frank (BOF)
                        Chapter 1
    —Evaluating Macroeconomic Performance
    1. Rising Living Standards – Economic Growth
     
    —Tendency for the level of output (i.e. quantity and quality of goods and services) to increase over time.

    —Output divided by population = output per capita - GDP per capita

    —May also care about the distribution of living standards
    —https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html
     
    —Real Quarterly GDP per capital - Aust
    —Evaluating Macroeconomic Performance
     2. Stable Business Cycle – low volatility in fluctuations of actual output around its trend or potential output.
    —Evaluating Macroeconomic Performance
    3. Relatively Stable Price Level – low (positive) rate of inflation
     
    —Inflation: a sustained increase in the overall level of prices in an economy through time

    —Rapidly changes in prices alter the real purchasing power of goods and causes hardships
    —
    —Inflation has been concern for most developed countries over the last 40 years.
     
    —Japan is an exception and has experienced deflation over the last decade. 
    —Australian Inflation - Consumer Price Index Measure  
    —Evaluating Macroeconomic Performance
    4. Sustainable Levels of Public and National Debt   
    —Public debt – borrowing by public sector from private sector
    —Influenced by government budget deficits/surpluses
    —Foreign debt – borrowing by domestic residents from foreign countries
    —Influenced by an economy’s current account deficits/surpluse
    —
    —Budget Balance and Net Government Debt for Australia
    —Evaluating Macroeconomic Performance
    5. Balance between Current and Future Consumption 
    —How much should an economy save/invest? 
    6. Full Employment
    —Provision of employment for all individuals seeking work
    —ECON1102 Macroeconomics 代写
    —
    —Australian Private Investment and National Savings
    —Evaluating Macroeconomic Performance
    1.Rising Living Standards – Economic Growth
    2.Stable Business Cycle
    3.Relatively Stable Price Level – Inflation between 2-3 %
    4.Sustainable Levels of Public and National Debt
    5.Balance between Current and Future Consumption
    6.Full Employment
    —Australia’s Unemployment Rate Monthly
    —1. Indicators of Macroeconomic performance
    How do we know when an economy is performing well?
    üRising living standards
                - with a stable business cycle
    üLow inflation
    üFull employment
    üEnsuring sustainable levels of public and national debt
    üBalance between current and future expenditure - an optimal amount of saving
    —What about Australia?
    üEconomic growth (real GDP) with stable business cycle ?
    üInflation ? 
    üUnemployment rate ? 
    üPublic debt ?  National debt ? Rising
    ühttp://www.abc.net.au/news/2014-03-13/joe-hockey-correct-on-australia-debt-and-spending/5310736
    üAn optimal amount of saving ? No   
    —Australia
    —Australia
    —2. Measuring Output (GDP)
    üGDP – Gross Domestic Product   
      The market value of all final goods and services produced in an economy in a given time period
    üThree ways of measuring 
    Aggregate production
    Aggregate income
    Aggregate expenditure
    —Measuring Output - GDP
      GDP – production approach
      Aggregate the value added of every producer (value added = gross output less value of intermediate inputs in production process)

      GDP – income approach
      Aggregate the incomes generated in the production of goods and services  Wages  Profits
    —Measuring GDP
    —The market value of final goods and services produced in a country during a given period.
    —Astralian GDP in March 2013 = $379.6 billion 
    —GDP is measure of aggregate production or output
    —Use market prices to value (or weight) quantities of various goods and service
    —Example:   Quantity   Market Price
      10 cars   $20,000 per car   100 apples   $1 per apple
    —
    —Masuring GDP
    —GDP = $200,000 + $100 = $200,100
    —
    —What about goods and services with no observed market price? 
    —
    —Some are included in GDP:  
    —National defense – use costs of provision (costs of buying equipment, wages of soldiers, etc.)

    —Some are excluded from GDP
    —Unpaid housework
    —Measuring GDP
    —GDP excludes goods and services that are produced in other countries (but might be consumed in Australia) Imports
    —Excludes goods and series that were produced in some earlier periods , but are resold in the current periods e.g. second hand goods
    —Measuring GDP
    —GDP excludes intermediate goods and services. These goods are used-up in the production process. 
    —Example: In the production of a loaf of bread, the flour used is an intermediate input and is not counted in GDP. 
    —Concept of Value Added: The market value of a firm’s production less the cost of inputs purchased from other firms
     
    —Value Added in Computer Sales: Chapter 1, Problem 2 (Textbook)
    Intelligence Incorporated produces 100 computer chips and sells
    them for $200 each to Bell Computers.
    —Using the chips and other labour and materials, Bell produces 100 personal computers.
    —Bell sells the computers, bundled with software that Bell licenses from Macrosoft at $50 per computer, to PC Charlie’s for $800 each.
    —PC Charlie’s sells the computers to the public for $1000 each.
    —Calculate the total contribution to GDP using the value‐added
    Method.
    Do you get the same answer by summing up the market
    values of final goods and services?
    Value Added in Computer Sales: Chapter 1, Problem 2 (Textbook)
    Firm   Sales   Cost of inputs   Value Added
    Intel Incorp    20,000            0      20,000
    Macro Soft     5,000                          0        5,000
    Bell   80,000  25,000     55,000
    PC Charlie’s               100,000  80,000     20,000 
    PC Charlie’s final sales = $100,000
    Sum of Value Added = $100,000
    —Measuring GDP
    —GDP is a flow variable – measured over a period of time.  
    —Quarter – March, June, September, December
    Australian GDP in March 2012 = $368.4 billion 
    Australian GDP in March 2013 = $379.6 billion
     ar – just add-up GDP over 4 quarters
    Calendar – Mar-12 + Jun-12 + Sep-12 + Dec-12
    Financial – Sep-12 + Dec-12 + Mar-13 + Jun-13
    —Australian GDP in 2012 (Calendar) = $1,488.4 billion 
    —GDP: The Expenditure Approach
    Accounting Identity
    Expenditure on goods and services by final users must equal the value of their production. 
    Aggregate the expenditures of final users of goods and services produced in the economy   
          Consumption (C) purchase by households
      + Investment (I) purchase by firms
       +  Government expenditure (G)
      +  Exports (X)  
    less Imports (M)
            GDP = Expenditure
      Y = C + I + G + NX
    —Australian GDP March Quarter 2013
    Expenditure Approach
      $billion
    Household Consumption    210.0
    Private Investment                   86.8
    Government (Public) Spending      85.7
    Change in Inventories                    -0.5
    Exports                   76.4
    Less Imports       76.0
    Total    382.4
    Statistical discrepancy                     -2.8
    GDP     379.6
    l vs Real GDP
    —Nominal  - values quantities of goods and services produced at current year prices
    —Real (or constant price or chain value measure)
    ◦Values quantities of goods and services produced at base year prices – measure of the actual physical volume of production
    —Simple Example
      2007   2008   % Change
    No. of Cars   10  10         0
    Price of Cars   $20,000          $40,000                      100
     
    No. of Apples   100  100        0
    Price of Apples       $1   $2    100
    Nominal GDP  $200,100         $400,200      100
    Real GDP ECON1102 Macroeconomics 代写
    2007 prices   $200,100  $200,100          0
    2008 prices   $400,200  $400,200                   0 
    Choice of Base Year (Bit Technical)
    —In the above example whether we use 2007 or 2008 as base year prices gives the same answer for the growth rate of real GDP
    —This is not the case in general, particularly if you are comparing real GDP over a 5-10 year period.  
    —Using initial prices (i.e. 2007) is know as a Laspeyres index
    —Using final prices (i.e. 2008) is known as a Paasche index
    —
    —Chain-weighted measure of Real GDP 
    —For any two consecutive years compute the growth rates of real GDP implied by both the Laspeyres and the Paasche indexes. 
    —Then take the average of the two growth rates and this is the chain-weighted growth rate.  This can be used to compute a real chained-weighted GDP.
    —Finally to compute a change index over a long period, the above approach is applied on a year-by-year basis. 
    —Simple Example
      2007   2008   % Change
    No. of Cars   10  10          0
    Price of Cars   $20,000  $40,000      100
     
    No. of Apples   100  1000      900
    Price of Apples       $10  $25       150
     
    Nominal GDP  $201,000  $425,000        111
    Real GDP 
    2007 prices    $201,000   $210,000       4.5
    2008 prices   $402,500  $425,000                 5.
    —Chain-weighted measure of Real GDP 
    —Take average of growth rates implied by 2007 and 2008 prices.
    —Choose either 2007 or 2008 as the base-year (nominal=real GDP).  Let’s pick 2007
      2007       2008
    —Nominal GDP   201,000     425,000
    —Real GDP   201,000      211,151  
    —Income Method
    —GDP also equals the aggregate incomes paid to
    ◦Labour (L)
    ◦Capital (K)
       in the production of goods and services.
    —GDP = Labour Income + Capital Income
    —Australian GDP March Quarter 2013
    Income Approach
       $ Billion
    Compensation of Employees                   184.0  
    Gross Operating Surplus      126.7
    Gross Mixed Income                                                     30.1
    GDP (at factor cost)      340.8
     
    Taxes – Subsidies                                    37.5
    GDP (Market Prices)     378.3
    Statistical discrepancy           1.3
    GDP                                    379.6
    —Nominal vs real GDP
    üNominal GDP: a measure of GDP in which quantities produced are measured at current year prices (measures the VALUE of production)
    ü
    üReal GDP: a measure of GDP in which quantities produced are measured at base year prices (measures the VOLUME of production)
    —Why is economic growth a macro goal?
    üHiher living standards
    üIncreased consumption possibilities
    üImproved quality of life
    —
    Real GDP is a measure of output – is it a good measure of economic wellbeing?
       No - consider the omissions:
    ûHousehold production
    ûUnderground economic activity
    ûOther non market production
    ûEnvironmental quality
    ûHealth and life expectancy
    ûLeisure
    ûEconomic equality
    BUT new measures are being developed

    —Alternatives (complements) to GDP
    —Direct measure of Happiness
    ◦Survey – based measures ( ask people how happy they are on a scale of 1 to 10
    —http://www1.eur.nl/fsw/happiness/index.html
    ◦
    —Index of variables that might affect welfare
    —http://www.smh.com.au/national/wellbeing
    —3. Measures of the Price Level
    —We want to measure the average level of prices in the economy.
    —Main Measures
    ◦Consumer Price Index (CPI)
    ◦GDP Deflator/Price Index
    —CPI – For a given period, measures the cost in that period of a given basket of goods and services relative to their cost in a fixed year – called a base year.
    —Construct a CPI
    Choose a basket of goods and services
    Basket           2000 (base)  2008
    Rent (2 bedroom flat ) $500        $630
    Hamburgers (60)      $150  $150 
    CDs (2)         $30             $70
    Total Expenditure       $680    $850 
    CPI =
    Cost of base-year basket of goods and services in current year
    Cost of base-year basket of goods and services in base year 
    —CONSUMER Price Index
    —CPI = $850/$680 = 1.25
    —Cost of living is 25 percent higher in 2008 than it was in 2000
    —Average prices are 25 percent higher in 2008 than in 2000 
    —Australian CPI
    —Published quarterly by ABS
    —Household Expenditure Survey used to determine typical basket
    —Base year changes every 5 years
    —
    —Inflation/Deflation
    —Inflation is measured by the percentage change in the CPI over a given period.
    —Inflation rate = 0 implies prices are constant
    —Inflation rate > 0 implies prices are rising
    —Inflation rate < 0 implies prices are falling –Deflation
    —Is the CPI a good measure of inflation?
    The consumer price index (CPI) is widely used as a measure of inflation.
    ØCPI includes imports (not exports nor investment goods nor goods purchased by government)
    ØSpending patterns of average household
    ØCPI (as a base/fixed weight index) is subject to bias:
    üNew goods bias
    üCommodity substitution bias
    ØCPI doesn’t account for quality changes
    —Is the CPI a good measure of inflation?
    —Quality Adjustment and New Goods Bias
    ◦Quality improvements may show up as higher prices for goods and services
    ◦New goods are often not included until CPI is re-based
    —Substitution Bias
    ◦Use of a fixed basket means that no allowance is made for consumers’ substitution toward relatively less expensive goods. 
    —CPI tends to overstate the rate of inflation.
     
    —Cost of Inflation
    —Important to distinguish between relative price change and a change in the general price level 
    —Shoe-leather costs – inflation reduces the real purchasing power of a given amount of money
    —Menu costs – real costs of changing prices
    —Introduces noise into the price mechanism
    —Distorts tax systems (if not indexed to inflation)
    —Unexpected re-distributions of wealth
    —Why do we care about inflation?
    Costs associated with inflation:
    ØDestroys the purchasing power of money
    ØDisrupts workings of price system
    ØMisallocation of resources (saving/investment)
    ØDistorts the tax system
    ØUnexpected redistribution of income and wealth
    ØReduces international competitiveness
    ØReduces the REAL interest rate
    DEFLATION IS ALSO A PROBLEM – redistribution, asset prices, expectations, real interest rates
    —Inflation and interest rates
        r = i – p
      r = real interest rate
      i = nominal (market) interest rate
      p = inflation rate
    —Which is the best deal?
    Year       Interest rate      Inflation rate    real interest rate
    1970     6.48                     3.26  3.22
    1975                8.49                    16.81  -8.32         
    1980              11.50                    10.24               1.26 
    1985              13.45                      4.27               9.18 
    1990              14.05   8.02               6.03 
    1995                8.10                      3.22               4.88 
    —Fisher Effect
       Nominal interest rate = real rate + (expected) inflation rate
      r (real interest rate) measures the REAL purchasing power of a financial asset
    —ECON1102 Macroeconomics 代写