Instructor’s Introduction to Chapter 2: This PowerPoint chapter contains in-class exercises requiring students to have calculators. To help motivate the chapter, it may be helpful to remind the students that much of macroeconomics---and this book---is devoted to understanding the behavior of aggregate output, prices, and unemployment. Much of Chapter 2 will be familiar to students who have taken an introductory economics course. Therefore, you might consider going over Chapter 2 fairly quickly. This would allow more class time for the subsequent chapters, which are more challenging. Instructors who wish to shorten the presentation might consider omitting : a couple of slides on GNP vs. GDP a slide on chain-weighted real GDP vs. constant dollar real GDP some of the in-class exercises (though I suggest you ask your students to try these within 8 hours of the lecture, to get reinforcement of the concepts while the material is still fresh in their memory. There are hidden slides you may want to “unhide.” They show that the GDP deflator and CPI are, indeed, weighted averages of prices. If your students are comfortable with algebra, then this material might be helpful. However, it’s a bit technical, and doesn’t appear in the textbook, so I’ve hidden these slides--they won’t appear in the presentation unless you intentionally “unhide” them.

Learning objectives In this chapter, you will learn about: Gross Domestic Product (GDP) the Consumer Price Index (CPI) the Unemployment Rate These are three of the most important economic statistics. Policymakers and businesspersons use them to monitor the economy and formulate appropriate policies. Economists use them to develop and test theories about how the economy works. Because we’ll be learning many of these theories, it’s worth spending some time now to really understand what these statistics mean, and how they are measured.

Gross Domestic Product Two definitions: Total expenditure on domestically-produced final goods and services Total income earned by domestically-located factors of production Most students, having taken principles of economics, will have seen this definition and be familiar with it. It’s not worth spending a lot of time on. It might be worthwhile, however, to briefly review the factors of production.

Why expenditure = income In every transaction, the buyer’s expenditure becomes the seller’s income. Thus, the sum of all expenditure equals the sum of all income. Thus, the sum of all expenditure in all transactions must equal the sum of all income to all sellers (including people who sell the services of the factors of production they own.)

The Circular Flow

Value added definition: A firm’s value added is the value of its output minus the value of the intermediate goods the firm used to produce that output. It might be useful here to remind students what “intermediate goods” are.

Exercise: (Problem 2, p.38) Compute A farmer grows a bushel of wheat and sells it to a miller for $1.00. The miller turns the wheat into flour and sells it to a baker for $3.00. The baker uses the flour to make a loaf of bread and sells it to an engineer for $6.00. The engineer eats the bread. Compute value added at each stage of production GDP “Compute GDP” assuming, of course, that these are the only transactions in the economy. Lessons of this problem: GDP = value of final goods = sum of value at all stages of production We don’t include the value of intermediate goods in GDP because their value is already embodied in the value of the final goods. Answer: Each person’s value-added (VA) equals the value of what he/she produced minus the value of the intermediate inputs he/she started with. Farmer’s VA = $1 Miller’s VA = $3 Baker’s VA = $3 GDP = $6 Note that GDP = value of final good = sum of value-added at all stages of production. Even though this problem is highly simplified, its main lesson holds in the real world: the value of all final goods produced equals the sum of value-added in all stages of production of all goods.

Final goods, value added, and GDP GDP = value of final goods produced = sum of value added at all stages of production The value of the final goods already includes the value of the intermediate goods, so including intermediate goods in GDP would be double-counting.

The expenditure components of GDP consumption investment government spending net exports

Consumption (C) def: the value of all goods and services bought by households. Includes: durable goods last a long time ex: cars, home appliances non-durable goods last a short time ex: food, clothing services work done for consumers ex: dry cleaning, air travel. A consumer’s spending on a new house counts under investment, not consumption. More on this in a few moments, when we get to Investment. A tenant’s spending on rent counts under services -- rent is considered spending on “housing services.” So what happens if a renter buys the house she had been renting? Conceptually, consumption should remain unchanged: just because she is no longer paying rent, she is still consuming the same housing services as before. In national income accounting, (the services category of) consumption includes the imputed rental value of owner-occupied housing. To help students keep all this straight, you might suggest that they think of a house as a piece of capital which is used to produce a consumer service, which we might call “housing services”. Thus, spending on the house counts in “investment”, and the value of the housing services that the house provides counts under “consumption” (regardless of whether the housing services are being consumed by the owner of the house or a tenant).

U.S. Consumption, 2001 source: Bureau of Economic Analysis, U.S. Department of Commerce http://www.bea.doc.gov

Investment (I) def1: spending on [the factor of production] capital. def2: spending on goods bought for future use. Includes: business fixed investment spending on plant and equipment that firms will use to produce other goods & services residential fixed investment spending on housing units by consumers and landlords inventory investment the change in the value of all firms’ inventories In definition #1, note that aggregate investment equals total spending on newly produced capital goods. (If I pay $1000 for a used computer for my business, then I’m doing $1000 of investment, but the person who sold it to me is doing $1000 of disinvestment, so there is no net impact on aggregate investment.) The housing issue A consumer’s spending on a new house counts under investment, not consumption. A tenant’s spending on rent counts under services -- rent is considered spending on “housing services.” So what happens if a renter buys the house she had been renting? Conceptually, consumption should remain unchanged: just because she is no longer paying rent, she is still consuming the same housing services as before. In national income accounting, (the services category of) consumption includes the imputed rental value of owner-occupied housing. To help students keep all this straight, you might suggest that they think of a house as a piece of capital which is used to produce a consumer service, which we might call “housing services”. Thus, spending on the house counts in “investment”, and the value of the housing services that the house provides counts under “consumption” (regardless of whether the housing services are being consumed by the owner of the house or a tenant). Inventories If total inventories are $10 billion at the beginning of the year, and $12 billion at the end, then inventory investment equals $2 billion for the year. Note that inventory investment can be negative (which means inventories fell over the year).

U.S. Investment, 2001 source: Bureau of Economic Analysis, U.S. Department of Commerce http://www.bea.doc.gov

Investment vs. Capital Capital is one of the factors of production. At any given moment, the economy has a certain overall stock of capital. Investment is spending on new capital.

Stocks vs. Flows More examples: stock flow a person’s wealth a person’s saving # of people with # of new college college degrees graduates the govt. debt the govt. budget deficit

Government spending (G) G includes all government spending on goods and services. G excludes transfer payments (e.g. unemployment insurance payments), because they do not represent spending on goods and services. Transfer payments are included in “government outlays,” but not in government spending. People who receive transfer payments use these funds to pay for their consumption. Thus, we avoid double-counting by excluding transfer payments from G.

Government spending, 2001 source: Bureau of Economic Analysis, U.S. Department of Commerce http://www.bea.doc.gov

Net exports (NX = EX - IM) def: the value of total exports (EX) minus the value of total imports (IM) source: FRED Database, The Federal Reserve Bank of St. Louis, http://www.stls.frb.org/fred/ Before showing the data graph, the following explanation might be helpful: Remember, GDP is the value of spending on our country’s output of goods & services. Exports represent foreign spending on our country’s output, so we include exports. Imports represent the portion of domestic spending (C, I, and G) that goes to foreign goods and services, so we subtract off imports. NX, therefore, equals net spending by the foreign sector on domestically produced goods & services.

An important identity Y = C + I + G + NX where Y = GDP = the value of total output C + I + G + NX = aggregate expenditure A few slides ago, we defined GDP as the total expenditure on the economy’s output of goods and services (as well as total income). We can also define GDP as (the value of) aggregate output, not just spending on output. An identity is an equation that always holds because of the way the variables are defined.

A question for you: Suppose a firm produces $10 million worth of final goods but only sells $9 million worth. Does this violate the expenditure = output identity? If you do not wish to pose this as a question, you can “hide” this slide and “unhide” the next one, which simply gives students the information. Suggestion (applies generally, not just here): When you pose this (or any) question to your class, don’t ask for students to volunteer their answers right away. Instead, tell them to think about it for a minute and write their answer down on paper. Then, ask for volunteers (or call on students at random). Giving students this extra minute will increase the quality of participation as well as the number of students who participate. Correct answer to the question: Unsold output adds to inventory, and thus counts as inventory investment – whether intentional or unplanned. Thus, it’s as if a firm “purchased” its own inventory accumulation. Here’s where the “goods purchased for future use” definition of investment is handy: When firms add newly produced goods to their inventory, the “future use” of those goods, of course, is future sales. Note, also, that inventory investment counts intentional as well as unplanned inventory changes. Thus, when firms sell fewer units than planned, the unsold units go into inventory and are counted as inventory investment. This explains why “output = expenditure” -- the value of unsold output is counted under inventory investment, just as if the firm “purchased” its own output. Remember, the definition of investment is goods bought for future use. With inventory investment, that future use is to give the firm the ability in the future to sell more than its output.

Why output = expenditure Unsold output goes into inventory, and is counted as “inventory investment”… …whether the inventory buildup was intentional or not. In effect, we are assuming that firms purchase their unsold output.

GDP: An important and versatile concept We have now seen that GDP measures total income total output total expenditure the sum of value-added at all stages in the production of final goods This is why economists often use the terms income, output, expenditure, and GDP interchangeably.

GNP vs. GDP Gross National Product (GNP): total income earned by the nation’s factors of production, regardless of where located Gross Domestic Product (GDP): total income earned by domestically-located factors of production, regardless of nationality. (GNP – GDP) = (factor payments from abroad) – (factor payments to abroad) Emphasize that the difference b/w GDP and GNP boils down to two things: location of the economic activity, and ownership (domestic vs. foreign) of the factors of production. From the perspective of the U.S., factor payments from abroad includes things like wages earned by U.S. citizens working abroad profits earned by U.S.-owned businesses located abroad income (interest, dividends, rent, etc) generated from the foreign assets owned by U.S. citizens Factor payments to abroad includes things like wages earned by foreign workers in the U.S. profits earned by foreign-owned businesses located in the U.S. income (interest, dividends, rent, etc) that foreigners earn on U.S. assets Chapter 3 introduces factor markets and factor prices. Unless you’ve already covered that material, it might be worth mentioning to your students that factor payments are simply payments to the factors of production, for example, the wages earned by labor.

In your country, which would you want to be bigger, GDP or GNP? Discussion Question: In your country, which would you want to be bigger, GDP or GNP? Why? This issue is subjective, and the question is intended to get students to think a little deeper about the difference between GNP and GDP. Of course, there is no single correct answer. Some students offer this response: It’s better to have GNP > GDP, because it means our nation’s income is greater than the value of what we are producing domestically. If, instead, GDP > GNP, then a portion of the income generated in our country is going to people in other countries, so there’s less income left over for us to enjoy.

(GNP – GDP) as a percentage of GDP for selected countries, 1997. Data is from 1997. Source: World Development Indicators 2000 CD-ROM, World Bank. For the U.S., GDP and GNP are very close. Thus, students may not realize why we bother teaching them the difference. But the data on this slide make clear that the difference is very important for some countries. In Brazil, the number is –2.0%, which may seem tiny. But consider: it means that 2% of the income generated in Brazil is taken away and paid to foreigners. Almost 9% of the value of Chile’s production is paid to foreigners. In some countries, GNP > GDP. Ask your students if they can think of a couple possible reasons for this. In other countries, GDP > GNP. Ask if anyone can think of possible reasons for this. Reasons why GNP may exceed GDP: Country has done a lot of lending or investment overseas and is earning lots of income from these foreign investments (income on nationally-owned capital located abroad). Take Kuwait. This tiny country earns (from oil revenue) more than it spends; the difference is invested (in the layperson’s sense of the term investment) in foreign assets, such as stocks and real estate. Thus, Kuwait has a lot of foreign-owned capital that generates income. This income comes back to Kuwait, making its GNP bigger than its GDP. A significant number of citizens have left the country to work overseas (their income is counted in GNP, not GDP). I’d guess this is why GNP > GDP in Bangledesh; there unfortunately is not an abundance of economic opportunity for skilled workers in Bangledesh.   …continued on the “notes” portion of the next slide (the slide itself is “hidden”)

(GNP – GDP) as a percentage of GDP for selected countries, 1997. …continued from “notes” portion of the previous slide   Reasons why GDP may exceed GNP: - Country has done a lot of borrowing from abroad, or foreigners have done a lot of investment in the country (income earned by foreign-owned domestically-located capital). This is most likely why Mexico’s GDP > GNP. - Country has a large immigrant labor force In Bangledesh, we see a positive gap, meaning GNP > GDP. This is probably because many citizens leave the country for better job opportunities elsewhere. In Singapore, GNP > GDP probably because the country has done a lot of foreign investment, and so earns a lot of interest/dividend income from the capital that it owns abroad. Mexico: Mexico has financed some of its capital stock by foreign borrowing; the income earned by this capital is paid to its foreign owners, causing GDP to exceed GNP. USA: the U.S. is the world’s largest net debtor nation, where the “net debt” refers to the value of foreign-owned assets in the U.S. minus U.S. owned assets abroad. Given this, you’d expect the GNP-GDP gap to be negative, other things equal. The gap is not negative, though, probably because U.S. assets are considered relatively safer than foreign assets, so the U.S. is able to borrow at a lower rate than it lends. However, if the U.S.’ net debt continues to grow, foreigners may start requiring higher returns to send us additional capital. Then, the U.S.’ GNP-GDP gap could become negative, and potentially large. This topic will be explored further in a future chapter.

Taiwan’s GNP v.s. GDP Taiwan's gross national product (GNP) in 2002 was US$289.3 billion, and per capita GNP was US$12,916. Its gross domestic product (GDP) in 2002 was US$281.9 billion, of which 31.05 percent was contributed by the industrial sector and only 1.86 percent by agriculture. The service sector, which has been particularly robust and responsible for generating more than 50 percent of Taiwan's GDP since 1988, accounted for 67.10 percent of the GDP in 2002

廣告唱衰台灣？陳總統：台灣經濟比韓國好 中央社╱台北十八日電 2007.09.18 01:03 pm 陳總統指出，最近有人表面上在入聯公投的議題上「拿香跟著拜」，但私底下卻唱衰台灣，說台灣的經濟很差，說亞洲四小龍已經沒有台灣。過去的七年多，有人把「唱衰台灣」當作政治運動來推動，用各種方式來傷害台灣的信心、打擊台灣的經濟，希望得到個別政黨與個人的私利，這是一件使人非常遺憾的事情。 他進一步表示，最近由某一個政黨所拍的一支電視廣告，請一位韓國朋友來批評台灣政府，說政府只會「拼政治」，不會「拼經濟」。對任何的批評，包括對他本人在內，政府都願意謙虛接受。 陳總統拿出數據反駁電視廣告，他指出，批評要根據事實，不能自己沒做功課就亂講。過去的四年，也就是2003年到2006年，台灣經濟成長率平均為 5.05%，比韓國的 4.25%要好，台灣今年全年的經濟成長率預估4.6%，與韓國的4.4%到4.8%相較，根據不同單位的預測，完全不輸韓國。

三、當前經濟發展情勢 2000～2002年我國的年平均經濟成長率較1996～1999年平均經 濟成長率衰退3.27個百分點，台灣經濟的衰退率在亞洲各國中 高居第一。 單位：％ 國 別 年 中 華 民 美 日 本 新 加 坡 韓 香 港 泰 馬 來 西 亞 印 尼 菲 律 賓 1996 1997 1998 1999 2000 2001 2002 6.10 6.68 4.57 5.42 5.86 -2.18 3.59 3.60 4.40 4.30 4.10 3.80 0.30 2.40 3.50 1.90 -1.1 0.20 2.80 0.40 0.10 8.10 8.50 -0.9 6.40 9.40 -2.4 2.20 6.80 5.00 -6.7 10.9 9.30 3.10 6.30 5.10 -5.0 3.40 10.2 0.50 2.30 5.90 -1.37 -10.51 4.43 4.64 5.30 10.0 7.30 -7.4 7.80 4.70 -13.1 0.80 4.90 5.85 5.19 -0.59 4.38 4.50 1996～ 1999平均 A 5.69 1.13 5.52 4.00 1.95 -0.39 0.05 3.46 2000～ 2002平均 B 2.42 2.17 1.10 3.07 6.23 4.33 3.91 3.97 4.42 B-A -3.27 -1.93 -0.03 -2.45 2.23 2.38 3.92 0.96 資料來源：依各國政府統計資料整理。

Real vs. Nominal GDP GDP is the value of all final goods and services produced. Nominal GDP measures these values using current prices. Real GDP measure these values using the prices of a base year.

Practice problem, part 1 Compute nominal GDP in each year 2001 2002 2003 P Q good A $30 900 $31 1,000 $36 1,050 good B $100 192 $102 200 205 This slide (and a few of the following ones) contain exercises that you can have your students do in class for immediate reinforcement of the material. These problems require calculators (well, This problem requires calculators. If most of your students do not have calculators, you might “hide” this slide and instead pass out a printout of it for a homework exercise. Tell students that if they don’t have Or: just have them write down the expressions that they would enter into a calculator if they had calculators, i.e. Nominal GDP in 2001 = 30*900 + 100*192. Compute nominal GDP in each year Compute real GDP in each year using 2001 as the base year.

Answers to practice problem, part 1 Nominal GDP multiply Ps & Qs from same year 2001: $46,200 = $30  900 + $100  192 2002: $51,400 2003: $58,300 Real GDP multiply each year’s Qs by 2001 Ps 2001: $46,300 2002: $50,000 2003: $52,000 = $30  1050 + $100  205

U.S. Real & Nominal GDP, 1967-2001 Notice that the yellow line is steeper than the red line. That’s because prices generally rise over time. So, nominal GDP grows at a faster rate than real GDP. If you’re anal like me, you might ask students what is the significance of the two lines crossing in 1996. Answer: 1996 is the base year for this real GDP data, so RGDP = NGDP in 1996 only. Before 1996, RGDP > NGDP, while after 1996, RGDP < NGDP. This is intuitive if you think about it for a minute. Take 1970. When the economy’s output of 1970 is measured in the (then) current prices, GDP is about $1 trillion. Between 1970 and 1996, most prices have risen. Hence, if you value the country’s 1970 using 1996 prices (to get real GDP), you get a bigger value than if you just measure 1970’s output in 1970 prices (nominal GDP).

GDP Deflator The inflation rate is the percentage increase in the overall level of prices. One measure of the price level is the GDP Deflator, defined as After revealing the first bullet point, mention that there are several different measures of the overall price level. Your students are probably familiar with one of them---the Consumer Price Index, which will be covered shortly. For now, though, we learn about a different one <reveal next bullet point>, the GDP deflator. The GDP deflator is so named because it is used to “deflate” (remove the effects of inflation from) GDP and other economic variables.

Practice problem, part 2 Nom. GDP Real GDP GDP deflator inflation rate 2001 $46,200 n.a. 2002 51,400 50,000 2003 58,300 52,000 Use your previous answers to compute the GDP deflator in each year. Use GDP deflator to compute the inflation rate from 2001 to 2002, and from 2002 to 2003.

Answers to practice problem, part 2 Nom. GDP Real GDP GDP deflator inflation rate 2001 $46,200 100.0 n.a. 2002 51,400 50,000 102.8 2.8% 2003 58,300 52,000 112.1 9.1%

Understanding the GDP deflator The formula for the GDP deflator is 100*NGDP/RGDP. It’s not obvious to most students that this is a measure of the average level of prices. But, using some simple algebra, this slide shows that the GDP deflator really is a weighted average of prices. Because this material might seem a bit more technical, and isn’t in the textbook, I have “hidden” this slide. If you wish to include it in your lecture, simply “unhide it” --- click on the “Slide Show” pull-down menu and unselect “hide slide”. Note: Because the weights don’t all sum to 1, the GDP deflator is a weighted sum, not a weighted average. The GDP deflator is a weighted average of prices. The weight on each price reflects that good’s relative importance in GDP. Note that the weights change over time.

Working with percentage changes USEFUL TRICK #2 the percentage change in (X/Y )  the percentage change in X  the percentage change in Y EX: GDP deflator = 100  NGDP/RGDP. If NGDP rises 9% and RGDP rises 4%, then the inflation rate is approximately 5%.

Consumer Price Index (CPI) A measure of the overall level of prices Published by the Bureau of Labor Statistics (BLS) Used to track changes in the typical household’s cost of living adjust many contracts for inflation (i.e. “COLAs”) allow comparisons of dollar figures from different years Regarding the comparison of dollar figures from different years: If we want to know whether the average college graduate today is better off than the average college graduate of 1975, we can’t simply compare the nominal salaries, because the cost of living is so much higher now than in 1975. We can use the CPI to express the 1975 in “current dollars”, i.e. see what it would be worth at today’s prices. Also: when the price of oil (and hence gasoline) shot up in 2000, some in the news reported that oil prices were even higher than in the 1970s. This was true, but only in nominal terms. If you use the CPI to adjust for inflation, the highest oil price in 2000 is still substantially less than the highest oil prices of the 1970s.

How the BLS constructs the CPI Survey consumers to determine composition of the typical consumer’s “basket” of goods. Every month, collect data on prices of all items in the basket; compute cost of basket CPI in any month equals

Exercise: Compute the CPI The basket contains 20 pizzas and 10 compact discs. prices: pizza CDs 2000 $10 $15 2001 $11 $15 2002 $12 $16 2003 $13 $15 For each year, compute the cost of the basket the CPI (use 2000 as the base year) the inflation rate from the preceding year From 2002 to 2003, it’s not obvious that the inflation rate will be positive (that the basket’s cost will increase): the price of pizza rises by $1, the price of CDs falls by $1. However, since the basket contains twice as many pizzas as CDs, a given change in the price of pizza will have a bigger impact on the basket’s cost (and CPI) than the same sized price change in CDs.

answers: cost of inflation basket CPI rate 2000 $350 100.0 n.a. 2001 370 105.7 5.7% 2002 400 114.3 8.1% 2003 410 117.1 2.5%

The composition of the CPI’s “basket” Each number is the percent of the “typical” household’s total expenditure. source: Bureau of Labor Statistics, http://stats.bls.gov/cpihome.htm Ask students for examples of how the breakdown of their own expenditure differs from that of the typical household shown here. Then, ask students how the typical elderly person’s expenditure might differ from that shown here. (This is relevant because the CPI is used to give Social Security COLAs to the elderly; however, the elderly spend a much larger fraction of their income on medical care, a category in which prices grow much faster than the CPI.) The website listed above also gives a very fine disaggregation of each category, which enables students to compare their own spending on compact discs, beer, or cell phones to that of the “typical” household.

Understanding the CPI Example with 3 goods For good i = 1, 2, 3 Ci = the amount of good i in the CPI’s basket Pit = the price of good i in month t Et = the cost of the CPI basket in month t Eb = cost of the basket in the base period The next slide uses simple algebra to show that the CPI is a weighted average of prices; the weight on each price reflects that good’s relative importance in the CPI basket. The algebra is very similar to that of an earlier slide that showed that the GDP deflator is a weighted average of prices. I chose “E” to represent the cost of the basket because “E” stands for “Expenditure”, and using “B” or “C” for the cost of the basket didn’t feel right to me. (You can, of course, edit the slides to substitute whatever other letter or symbol you think would make more sense here.)

Understanding the CPI The CPI is a weighted average of prices. Note: Because the weights don’t all sum to 1, the CPI is a weighted sum, not a weighted average. The CPI is a weighted average of prices. The weight on each price reflects that good’s relative importance in the CPI’s basket. Note that the weights remain fixed over time.

Reasons why the CPI may overstate inflation Substitution bias: The CPI uses fixed weights, so it cannot reflect consumers’ ability to substitute toward goods whose relative prices have fallen. Introduction of new goods: The introduction of new goods makes consumers better off and, in effect, increases the real value of the dollar. But it does not reduce the CPI, because the CPI uses fixed weights. Unmeasured changes in quality: Quality improvements increase the value of the dollar, but are often not fully measured.

The CPI’s bias The Boskin Panel’s “best estimate”: The CPI overstates the true increase in the cost of living by 1.1% per year. Result: the BLS has refined the way it calculates the CPI to reduce the bias. It is now believed that the CPI’s bias is slightly less than 1% per year.

CPI vs. GDP deflator prices of capital goods included in GDP deflator (if produced domestically) excluded from CPI prices of imported consumer goods included in CPI excluded from GDP deflator the basket of goods CPI: fixed GDP deflator: changes every year

Two measures of inflation Percentage change 16 CPI 14 12 10 GDP deflator 8 Be sure to point out that the data are the percentage changes, not the levels, of the CPI and the GDP deflator. In 1980, the CPI increased much faster than the GDP deflator. Ask students if they can offer a possible explanation. In 1955, the CPI showed slightly negative inflation, while the GDP deflator showed positive inflation. Ask students for possible explanations. (For possible answers, just refer to previous slide.) 6 4 2 - 2 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 Year

蔬菜水果大落價 七月消費者物價指數 居然下跌 2007/08/07 中國時報 蔬菜水果大落價 七月消費者物價指數 居然下跌 多項商品漲漲漲，但和一般人感受不同的是，七月消費者物價指數（ＣＰＩ）還下跌，較去年同期跌○．三四％，連主計處都說，「大家一定很意外」。 主計處第三局科長吳昭明表示，七月ＣＰＩ甚至創下近十個月以來最大跌幅，這「與民眾的感受有所差距」，但如果扣除蔬菜、水果，七月ＣＰＩ年增率為一．四四％，是近五個月以來新高，這個漲幅就「與民眾感受較為接近」。 吳昭明說明，去年同期受到兩個颱風來襲，蔬果價格很高，但今年風調雨順，蔬菜與水果價格相對去年大幅下滑，其中蔬菜下跌二十九％、水果下跌十三％。主計處列舉多項跌幅較大的項目，例如蔥跌六十九％、木瓜、苦瓜、香瓜也跌近四成。「有買菜的家庭主婦會感受到。」他說。 根據主計處的資料，單單蔬菜、水果的跌價，就使ＣＰＩ跌一．六七個百分點，而漲幅較大的幾個項目，例如藥品及保健食品漲二十二％，但由於權值不高，只使ＣＰＩ增加○．二個百分點；水電燃氣漲四％，也只使ＣＰＩ增加○．一六個百分點。 吳昭明指出，外界經常質疑主計處公布的物價指數，但主計處的物價編寫完全依照國際的慣例，不能任意調整，否則「會有人為操作嫌疑」。目前的權數結構是依照九○年的情形編的，但主計處每五年會檢討一次權數結構，到民國九十七年二月公布消費者物價指數時，就會以九十五年的權數結構，日本、南韓也是五年檢討一次，主計處的修正「絕非亡羊補牢」。

消 費 者 物 價 指 數 變 動 分 析 表 基期：民國90年=100 民國96年 7月 類 別 權數 (‰) 本 月 指 數 本月指數與各期比較 本年前7月指數平均 與上月比較 (%) 對總指數影響 (百分點) 與上年同月比較 (%) 與上年12月比較(%) 指數 與上年同期比較 (%) 總指數 1000.00 105.01 -0.24 -0.34 0.72 104.43 0.47 1、食物類 250.54 109.61 -0.94 -0.25 -4.79 -1.32 -0.79 -0.21 109.30 -1.57 -0.42 肉類 25.17 114.00 -1.09 -0.03 1.28 0.03 0.22 0.01 114.46 -0.26 -0.01 魚介 16.73 118.09 0.41 5.48 0.10 1.48 117.94 6.24 0.11 基 本 分 類 蔬菜 27.89 119.80 -6.93 -29.07 -1.30 -5.04 -0.17 112.25 -7.74 水果 27.94 96.15 -5.18 -0.14 -12.68 -0.37 -10.77 -0.31 105.88 -10.80 -0.35 2、衣著類 47.46 103.73 -3.70 -0.18 2.51 -3.51 104.30 2.08 成衣 32.52 101.65 -4.90 -0.16 3.16 -5.48 102.61 2.16 0.07 3、居住類 307.94 100.23 -0.12 -0.04 1.06 0.31 1.24 0.36 99.72 1.03 0.30 房租 210.96 97.77 0.00 0.17 0.06 97.70 0.18 0.04 家庭管理費用 16.20 94.72 -3.81 -0.06 0.71 0.70 100.73 -0.53 水電燃氣 37.37 115.54 4.15 0.16 7.54 0.29 109.92 4.59 4、交通類 126.25 105.96 1.20 0.15 0.98 0.12 1.87 0.23 104.24 1.19 油料費 22.63 149.27 4.29 0.13 4.14 6.78 0.21 139.38 交通服務費 77.27 98.24 0.02 0.32 0.55 97.98 0.40 5、醫藥保健類 120.41 5.04 0.20 4.54 0.19 117.91 3.04 　　 藥品及保健食品 9.19 128.39 1.23 21.78 19.30 118.40 12.55 6、教養娛樂類 161.11 99.95 0.57 0.09 0.88 1.26 99.41 0.52 0.08 教養費用 118.75 100.67 0.25 0.61 0.53 100.41 -0.02 娛樂費用 42.36 98.27 1.54 1.67 3.40 96.94 2.06 7、雜項類 69.33 110.99 -0.38 1.33 1.63 111.38 1.92 0.14 香菸及檳榔 19.55 147.18 -1.49 2.81 2.58 148.81 4.30 1、商品類 528.52 108.01 -0.62 -1.24 -0.68 0.33 107.07 0.35 商 品 性 質 別 分 類 (不含食物) 277.97 106.58 -0.33 -0.09 2.32 0.63 1.94 0.54 105.08 2.24 非耐久性消費品 384.36 112.99 -1.76 -0.74 1.35 0.56 111.52 133.81 119.50 3.97 0.58 5.27 0.77 115.84 3.74 半耐久性消費品 62.59 100.85 -2.94 1.85 -3.11 -0.19 101.31 1.55 耐久性消費品 81.57 88.74 -0.22 -0.80 -0.05 -0.55 89.33 -0.29 2、服務類 471.48 101.63 0.75 0.34 0.83 0.38 101.46 0.28 居住服務 237.03 97.68 98.03 0.05 交通服務 74.10 98.09 0.27 0.51 97.84 醫藥保健服務 24.69 121.94 0.26 121.88 0.45 教養娛樂服務 104.85 108.22 2.73 106.79 1.70 雜項服務 30.81 100.75 100.96 特分 殊類 總指數(不含蔬菜水果) 944.17 104.91 1.44 104.23 1.15 1.07 總指數(不含食物) 749.46 103.47 1.34 0.97 1.25 0.92 102.81 1.22 0.89 總指數(不含蔬果魚介及能源) 873.10 103.02 1.11 0.94 0.66 102.80 說明：由於受查者延誤或更正報價，本表所載資料於公布後3個月內均可能修正。

臺灣 CPI’s “basket” 分類比重圖

臺灣CPI食物類比重圖

The composition of the CPI’s “basket” Each number is the percent of the “typical” household’s total expenditure. source: Bureau of Labor Statistics, http://stats.bls.gov/cpihome.htm Ask students for examples of how the breakdown of their own expenditure differs from that of the typical household shown here. Then, ask students how the typical elderly person’s expenditure might differ from that shown here. (This is relevant because the CPI is used to give Social Security COLAs to the elderly; however, the elderly spend a much larger fraction of their income on medical care, a category in which prices grow much faster than the CPI.) The website listed above also gives a very fine disaggregation of each category, which enables students to compare their own spending on compact discs, beer, or cell phones to that of the “typical” household.

中國時報 2007.10.06　 荷包變薄的痛苦指數 難算 彭漣漪／特稿     　九月消費者物價年增率破三％，說了八個月「物價還算平穩」的主計處終於鬆口表示，漲幅「相當顯著」。但其實，這個「高得礙眼」的三％，與民眾的感受還是很遠，無法表達民眾每天實際要面對荷包變薄的痛苦。     　以一個標準的四口、中產、雙薪、有車家庭來說，每天要吃的食物類漲了七．七％，每天要開的車，油價從去年的一公升二十二元漲到今年的近三十元，每日充飢的排骨飯、牛肉麵漲五元、十元，口渴時要買的飲料也漲，想省錢時吃的泡麵也漲，這些每天要掏錢買的東西，漲幅都遠遠超過三％。     　至於拉低消費者物價的物品，例如行動電話跌兩成、個人電腦跌四％、手提包及背包跌八％、微波爐跌六％，都不是每日會感受到的。這些東西，一、兩年才換一次，甚至到時候為了省錢，還可以將就著用，不必換。     　每天要面對的民生用品大漲特漲，和每一、兩年才會碰到的小跌微跌，感受真的是天差地遠，完全無法舒緩每日荷包變得愈來愈薄的痛苦。加上薪水幾年沒漲，未來前途不明，國家亂成一團，民眾的痛苦是以等比級數在增加，這就是主計處調查結果與民眾感受差距的來源。民眾承受的經濟壓力，心理層面的感受，主計處規規矩矩按照國際標準、幾個百分點乘幾百分點的理性算式，是完全算不出來的。     　而且，收入愈低的家庭，感受到的物價痛苦更劇烈。主計處過去曾經公布五等分位的消費結構，收入最低的五分之一家庭，食品及房租水電支出占了總消費的五十二％，但高所得家庭花在這上面的錢不到四成，當這些民生用品大漲特漲時，窮人受到的影響很大，有錢人則是不痛不癢，還有很多閒錢繼續買豪宅名車。     　根據主計處的家庭收支調查，去年高收入家庭每年可以存下六十五萬，中等收入家庭只存下九萬，最低收入家庭只存下一百八十三元。對最窮的人來說，這些民生用品的漲，真是痛在心裡，一百八十三元，只能負擔今年一、二十碗排骨麵多出來的漲幅，是難以承受的重。

中國時報 2007.10.06　 物價高拉警報 央行年底可能升息一碼 陳怡慈／台北報導     　主計處昨公布九月核心物價指數年增率一．九四％，創五年半以來新高，公股行庫財務部門主管表示，核心物價（Core CPI）走高，比消費者物價（ＣＰＩ）走高更值得關注，「這是警訊」，倘若核心物價持續上漲，研判央行今年底理監事會可能恢復六月底升息一碼（○．二五個百分點）的幅度。     　行庫主管說，核心物價是扣除蔬果與能源後的消費者物價指數，比較不受颱風等偶發性因素影響，央行自己有經濟研究室，這次堅定升息，可能與預先掌握九月份核心物價走高的訊息有關。     　行庫主管說，目前看來，央行今年底至少升息半碼（○．一二五個百分點）；匯率方面，因台灣仰賴出口經濟比重仍大，加上其他亞洲貨幣並未大幅升值、新台幣沒道理強出頭，研判今年底前，新台幣會在三二．五元兌一美元上下二角盤整，即波動區間三二．三元到三二．七元。

Categories of the population employed working at a paid job unemployed not employed but looking for a job labor force the amount of labor available for producing goods and services; all employed plus unemployed persons not in the labor force not employed, not looking for work.

Two important labor force concepts unemployment rate percentage of the labor force that is unemployed labor force participation rate the fraction of the adult population that ‘participates’ in the labor force

Exercise: Compute labor force statistics U.S. adult population by group, April 2002 Number employed = 134.0 million Number unemployed = 8.6 million Adult population = 213.5 million source: Bureau of Labor Statistics, U.S. Department of Labor. http://stats.bls.gov Use the above data to calculate the labor force the number of people not in the labor force the labor force participation rate the unemployment rate

Answers: data: E = 134.0, U = 8.6, POP = 213.5 labor force L = E +U = 134.0 + 8.6 = 142.6 not in labor force NILF = POP – L = 213.5 – 142.6 = 70.9 unemployment rate U/L = 8.6/142.6 = 0.06 or 6.0% labor force participation rate L/POP = 142.6/213.5 = 0.668 or 68.8%

Exercise: Compute percentage changes in labor force statistics Suppose the population increases by 1% the labor force increases by 3% the number of unemployed persons increases by 2% Compute the percentage changes in the labor force participation rate: the unemployment rate: Allow two minutes of class time for your students to work this exercise. This will give them immediate reinforcement of the definitions of the labor force participation rate, the unemployment rate, and the “arithmetic tricks for working with percentage changes” introduced earlier. 2% 1%

Okun’s Law Employed workers help produce GDP, while unemployed workers do not. So one would expect a negative relationship between unemployment and real GDP. This relationship is clear in the data…

Okun’s Law Okun’s Law states that a one-percent decrease in unemployment is associated with two percentage points of additional growth in real GDP Percentage change in real GDP 10 -3 -2 -1 1 2 4 3 8 6 1951 1984 2000 1999 1993 1975 1982 Change in unemployment rate