Last Friday I gave a session to UCC’s MBA class which looked at some recent data on the Irish Economy. The session was built around the Y = C + I + G + (X – M) representation of the economy. Here are the slides.
Interesting presentation Seamus. The Annual GDP figures look quite positive - we've moved a huge way away from the utter collapse of 2009 and are finally moving into territory where the Irish economy is at least growing. I didn't see the Live Register figures in your presentation but one of the striking things about them is their almost complete stability for the last year-and-a-bit. Would you have any stats to explain that?
Also, the NFIA figures are interesting - what drove the huge uptick at the end of 2010?
These are very basic questions about GDP. I would be very grateful if you answer them.
Why is consumption part of GDP? When we consume do we not become poorer? If Ireland spends 1 billion euro on alcohol and chocolate, surely that is different from ireland investing 1 billion in income generating assets? Yet C+I are added together as if they are the same.
And where is debt counted? If Ireland uses money to repay national debt, its financial position strengthens yet this is not reflected in GDP. And if Ireland borrows money can it not boost govt spending and thus inflate GDP?
Where is the balance sheet reflected in GDP? If Ireland rapidly exhausts its natural resources, then GDP will rise in the short term, but then fall. How do we measure the sustainability of growth?
What causes GDP figures to require correcting many months after publication?
Interesting presentation Seamus. The Annual GDP figures look quite positive - we've moved a huge way away from the utter collapse of 2009 and are finally moving into territory where the Irish economy is at least growing. I didn't see the Live Register figures in your presentation but one of the striking things about them is their almost complete stability for the last year-and-a-bit. Would you have any stats to explain that?
ReplyDeleteAlso, the NFIA figures are interesting - what drove the huge uptick at the end of 2010?
These are very basic questions about GDP. I would be very grateful if you answer them.
ReplyDeleteWhy is consumption part of GDP? When we consume do we not become poorer? If Ireland spends 1 billion euro on alcohol and chocolate, surely that is different from ireland investing 1 billion in income generating assets? Yet C+I are added together as if they are the same.
And where is debt counted? If Ireland uses money to repay national debt, its financial position strengthens yet this is not reflected in GDP. And if Ireland borrows money can it not boost govt spending and thus inflate GDP?
Where is the balance sheet reflected in GDP? If Ireland rapidly exhausts its natural resources, then GDP will rise in the short term, but then fall. How do we measure the sustainability of growth?
What causes GDP figures to require correcting many months after publication?