IntermediateMacroeconomicsLecture1

April11,2018

Prof.YoshimasaShiraiFacultyofEconomics

KeioUniversity

Lecture1

•  ReviewingSystemofNaIonalAccounIng

•  ReviewingkeytermsusedindescribingmacroeconomicacIviIes

ClassifyingAgents•  Agentsbyrole

–  Consumer(households)–  Producer(firms)–  ForeignCountry–  Government

•  DividingAgentsintotwo–  Private(non-government)vs.Public(government)–  Homevs.Foreign(NaIonality)–  DomesIcvs.Foreign(Geographic)

•  Agentsbyworkingstatus–  Employed–  Unemployed–  Notinlaborforce

GDPandGNP

•  GrossDomesIcProduct(GDP)– Totalvalueoffinalgoodsandservicesproducedinacountry

•  GrossNaIonalProduct(GNP)– TotalvalueoffinalgoodsandservicesproducedbyhomefactorofproducIon

ThreeMajorMarkets&AggregateEconomicTransacIoninFlowTermHowmuchvalueaddedisgivenfromsomeonetosomeoneelse?

IntheseeconomictransacIon,therearecorresponding(money)payments.

Final Goods Market

FactorMarkets

Consumer

Producer

Labor Market

Capital Market

government

Foreign Sector

FinancialMarket

GDP Wage and Rent Payments

Investment Expenditure

Export by Home

Import by Home

Foreign borrowing & Foreign selling of financial assets

Foreign lending & Foreign buying of financial assets

（Arrows indicate directions of payment）

GDPequalstoTotalExpenditureonFinalGoodsProducedinacountry

Final Goods Market

Consumer (Households）

Producers (Firms)

Government

Foreign Sector

Government Purchase of Goods and Services

Consumption Expenditure

Gross Domestic Products

InvestmentExpenditure

Home Exports

Home Imports

GDP

C

I

G

X

IM

Final goods and services sold in final goods market

Final goods and services bought in final goods market

GDP＋IM= +X

GDP=C+I+G+X-IM

Trade Balance （Arrows indicate directions of payment）

Japan 2015（Billion JP Yens） Data Source: http://www.esri.cao.go.jp/jp/sna/data/data_list/kakuhou/files/ h27/h27_kaku_top.html

532,191.4=

+91,658.7-91,644.8

532,191.4

299,862.1

299,862.1126,289.1+126,289.1

106,026.3

+106,026.3

C+I+G

GDPequalstofactorpaymentmadebydomesIcfirms　

FinalGoodsMarket

FactorMarkets

Producers (Firms)

LaborMarket

CapitalMarket

Government

GDP

Wagesandrentals Interestpaymentanddividends

Arrows indicate direction of payment

TaxonproducIonandimports

subsidies

EmployeescompensaIon Profits　CapitaldepreciaIon TaxonproducIonandimportsーsubsidies

2015（in billions） 263,309.0105,233.4120,064.7

45,575.7ー3,408.0

statistical descrepancy 1,416.6 GDP 532,191.4http://www.esri.cao.go.jp/jp/sna/data/data_list/kakuhou/files/

h27/h27_kaku_top.html

Data source:

Net Payments To Government

Relationship between GDP and GNP

FinalGoodsMarket

FactorMarkets

Producers (Firms)

Labor Market

Caital Market

Gov

GDP Wages&Rental

Interest&Dividends

(矢印は資金の流れ)

TaxonproductsandImportTariffーSubsidies

2015（BillionYensNominal） GDP

532,191.4Data Source:

HomeFactorIncomepaidbyDomesIcProducers

Foreign ForeignFactorIncomepaidbyDomesIcProducers（Factorpaymentstoabroad）

HomeFactorIncomepaidbyForeignProducers(Factorpaymentsfromabroad)

＋FactorPaymentsfromAbroad

ーFactorPaymentstoAbroad

＝GNP

29,838.2 9,920.3 553,109.3http://www.esri.cao.go.jp/jp/sna/data/data_list/kakuhou/files/ h27/h27_kaku_top.html

KeyTerms•  FactorsofProducIon

–  Capital(PhysicalandHuman)•  ValueAddedandfinalgoods

•  Assets:claimonfutureincome•  Money

–  Financialassetsusedasmediumofexchange–  CashandBankDeposits(andotherliquidassets)

•  FinancialTransacIon–  LendersandBorrowers–  FinancialAssetsandLiabiliIes–  TherearerisksinfinancialtransacIons–  FinancialMarketscreatefinancialassetsthroughfinancialtransacIons

andenablerisksharingamongassetholders

Flowvs.Stock

•  FlowmeasuresanamountofacIvityduringaperiod

•  Stockmeasuresanamountatamoment

Examples?