Showing posts with the label GDP

Experts Predict Economic Expansion for 2015 and 2016

Experts predict a few more strong laps around this race track we call our economy. Fifty forecasting experts with the National Association of Business Economics (NABE) believe the U.S. economy will grow at a rapid pace over the next two years. They suspect Gross Domestic Product (GDP) will increase on average 3.1% in 2015 and 2.9% in 2016.   Few can complain about the potential win-win situation brewing that will reward businesses with higher sales and better employment opportunities for job seekers. Experts believe the economy will improve to a point where unemployment dips under 5% by the end of 2016. The advantages of polling experts can help gauge the overall likelihood of success for the nation. These economic gurus have become successful in their fields and have opinions on economic growth and development. Funneling their opinions into useful metrics helps see that the average opinion is positive. Each expert sifts the questionnaire information through their personal

Is Europe Shrinking or Growing?

According to a European data analytics company called Markit Economics , Europe is still growing despite poor projections. Based upon a survey of purchasing managers and their prospects throughout 18 nations in Europe, their index of economic growth moved upward from 51.1 to 51.7 showing a higher rate of growth than previous expect. Some economists predicted a slight contraction but improvement in the market appears to have lowered the pressure by improving the situation. The study also shows that core countries like Germany and France are experiencing slower growth and waning job creation while those countries on the periphery are doing better. Combined Europe has a moderate rate of growth somewhere around .2 percent showing near stagnation. Such slow rates of growth give European officials pause in deciding their next course of action.  Selling prices for manufacturing and services is slowing.  Stagnating wages, lower oil prices, and lower demand are putting downward pres

Is GDP the Best Measurement of Economic Growth?

Numbers are only representations of ideal states and are in and of themselves subjective to what they measure. A paper by Stow & Stow (2013) discusses some of the fallacies of relying too heavily on Gross Domestic Product (GDP) without considering the deeper meaning of the numbers. Fallacies of judgment can occur when governments adjust their economy to improve upon GDP but don’t look at actual economic activity. GDP is calculated by adding =C+I+G+NX. Any improvement in consumption (C), Investment (I), Government Spending (G) and Net Exports (NX) would result in an improvement in overall GDP. The numbers could be misleading in the long run and lead to poor policies decisions. When consumers spend more money they are not necessarily improving total wealth of the nation even though GDP rises. They are simply spending their money, dwindling their savings, buying now instead of investing later, and taking on debt. They may be encouraging organizational profits but not excl

Improving Consumer Confidence and 3.5% GDP Comes with a Warning

The economy took a jump from July to September as Gross Domestic Product (GDP) calculations rose 3.5%. This is great news for those hoping to finish off the last of the recession and move onto more prosperous times. This improvement is the largest in a single quarter since 2003 and parallels higher levels of consumer enthusiasm. Positive news also comes with a warning to redirect focus to balancing budgets, encouraging long-term economic growth, and reducing income disparity.   To add to this positive news the University of Michigan’s consumer confidence index also jumped to 86.9 in October when compared to 84.6 in September.   With GDP expanding and consumer confidence rising few can argue that the world’s super power isn’t regaining economic ground.  Measuring economic growth often rests on imperfect numbers such as GDP that can create improper assumptions among decision-makers. GDP is seen as the total market value of the goods and services produced by a nation over a c

Improving Economic Activity Through Tariff Reductions

Trade is at the root of economic development. The easy movement of products and services across borders helps create an interconnected world where opportunities for international goods and companies abound. A paper by Dzerniek-Hanouze & Doherty (2013) discussed the significant advantages that can be found by opening trade routes at a national and regional level to ensure that products and services move smoothly to their destinations.  All trade is based on selling products from one entity to the next. According to Black’s Law Dictionary Trade is ,” The act or business of exchanging commodities by barter; or the business of buying and selling for money; traffic; barter.” A value laden product must transfer hands from one person to the next while a reciprocal value laden item (i.e. money) is exchanged in return.  Before revenue can be earned through the selling of products these products must be available and present for purchase. This means that the product is avail