Please enable JavaScript.
Coggle requires JavaScript to display documents.
ECONOMY CHAP 1 : How do economist put the world into numbers - Coggle…
ECONOMY CHAP 1 : How do economist put the world into numbers
A crah course in economics : What are "the numbers" economists more use, how they build them and how they use it
The number :
GDP
Statisticla indicator quantifying the aggregate result of all production activities of an economy during a given period of time
3 ways to measure it :
The sum of the value of all final goods and services.
The sum of all incomes in the economy
(wages+profits+dividends+rents+...).
The sum of all value-added produced within the economy.
GDP per capita = GDP / pop
Growth rate =
National accounting
une mesure des flux monétaires représentatifs de l'économie d'un pays pendant une période donnée,
promoted since 1945 within nat stat offices, coordiantion for international standards
Organising all economic agents and all economic activities in specific categories
Households (agents économiques)
Financial and non financial firms
Public sectors
Non commercial organisations
rest of the worls
Mesuring GDP as the sum of its "components
Balence of trade
Import - Export
The balance of payment
recensant les flux de biens, de services, de revenus, de transferts de capitaux, et les flux financiers que les résidents d'un pays dans leur ensemble (particuliers, entreprises ou État) entretiennent avec ceux du reste du monde.
The balance of payments accounts for all economic transactions between resident economic agents and non-resident economic agents.
Unemployement rate
2 def
Adm : nb of registration at Pôle emploi
Eco def : People who are not working since 15 days/ able to work / search for an employement
Prices and inflation
Raise in the general price level => as measured by the rate of change of the Cosumer Price Index (CPI°
Development : Why some countries are rich and some are poor ?
Measurin dvlpt rather than GDP/K or growth
Take into account
Human dvlpt index
Life expectancy at birth
Excepting time in schools
The Millenium Objectives for dvlpt ( UN)
Need to take care of inequalities : some country are rich but only a small nb of people own the wealth
2020 => Top 1% of the pop own 20% of the wealth
Introduction
Numbers
Bring objectivity
But often controverses
the quantify is not revelant
The nb are wrong
trust in the numbers => they are the tools for gouvernance
If the nb is bad = policy is bad
Quantification : establishing a convention of measuring
Ec + soc life complexe and heterogene => need to establish categories of equivalence (Need to have precesie caractéristic) Ex: unemployent
Once convention is estabilsh with criterias => should find a methode of mesuring (also controversial)
Data are build by human => 0 natural
What is the history of these numbers ? Should we trust economists numbers
World war II and economic planning
War effort require centralised control of production and consumption => Strong state intervention
AS to direct war effort => Gov set up or power up powerful public adm
Us Exemple :
War production board
Office of Price Administration
Departement of ag
Nat War Labor board
Most of these administration were inspired by what had been donne during the Great Depression
Need for reconstruction, preparation of another war and fear of recession
reconstruction in EU and Asia => infrastructure and indus capacities
Public adminsitration (similar as those established during the war) => should sterr economic actv
French Commissariat Général au Plan (46-2006)
In charge of indicative planning => cooordiante gov; state-owned comagnies, trade unions, ...
Setting quantitative objectives for nat production, investment, prince control, credit
Various economiexpert provide analysis, numbers, ...
Direction des prévision
INSEE
All these post-war economic administrations need numbers
All branches of gov and public adm should produce numbers on theirs actv
Setting up national statistical offices
recrutement of stasticians, engineers and economists to measure the economy
Bureaucratic machine
Collecting data
2 key economic ideas in this policu framwork
State interventiojn is necessary to stabilise the economy
The economy should be look at as a whole as the aggregate of its individuals components "macroeconomic" thinking L'économie doit être considérée comme un tout, comme l'agrégat de ses composantes individuelles : la pensée « macroéconomique »
The Keynesioan message
Keynes
Study Math, philo, eco
Against utilitarianism => pleasur and utility should not be confused with good
Interorgation about probability : Are objective or subjective beliefs
The bloomsbury group
Reject dogmas and conventions about the eintellectual freedom, creativity, moral, sexaul lib
=> shlould be investigate through Arts, litt, philo, economics
The General Theory
§main ideas
How explian the Great Depression
Unemployement is involuntary (independent from real wage and workers decisisonà
Employement depend on global demand
Capitalist economies are unstable because private investment is relies on entrpreneurs expectations
Gov intervention is necesary as to stabilize the global demand and insure full employment
What determines employment?
L’emploi est déterminé par la production => s’il y’a beaucoup de production = besoin de plus de md°
La production est déterminée par la demande globale => si beaucoup de personne veulent acheter un produit = ↗ de la p°
La demande globale est déterminée les composants de la demande globale (Consommation, investissement, dépense publique
What determines consumption ?
Depend on the wages and incomes (les Revenus)
But not all wages and incomes are spent (epargne, dons,...)
Keynes'animal spirits
Capitalist private invest => drivent by expected yield (rendement) => expception on the futur
But futur incertainty
Investiment decisions are based on conventional thinking
The opinion of the majority is the right opinion
The current state of affairs will continue in the future
If insécurity => création instability
Chg in convention
Huge shifts (chgt énormes)
Chgt in the aggregate demand, production and employment
The role of public intervention
Eco policies should guide private invest or subsitute pthem with public investment
Principale idéas
Theorie that aggradate demadn, production and employement
National accounting
State intervention is necessary to stabilise capitalist economies
A controversy about numbers
Context
Koopmans
Physicien
Soc marxist actvist when he was young
Interest for soc and eco => but trainning as thinking as a mathematicien
During war => go to Us ang join a public and mil adm => employe as a economist
VINING
Take part of the national bureau of eco research
All decision about large public compagnies should be analyed by economist
Both work at the NBER (national bureau of economic research
The starting point of the ocntroversy
Measurs buisnnes xycle of BURNS and MITCHELL
How explain the cycle in economic variable (sucession of expansion and recession)
are economic fluctuation that we often find in economic actv of naions who orgnaised their work with commercial entreprise
Durée ds cycles économiques : 10 à 12 ans)
Kepler : collect data much data and after do it theories
Newton : imagine theories and then prove it by tis data
Theories is necessaire avant les data, measurment
