This page is considered a perpetual construction site.
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 drobac@mailcity.com |
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GDP for the USA:
1996 - 2.8%
1997 - 3.8%
1998 - expected to be 2.5% - a slow down in the economy.
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Gross Domestic Product components
The measure of the USA's output of goods and services is calculated by the Commerce Department using the following items:
Personal consumption
Government expenditures
Private investment
Inventory growth
Trade balance
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Currently, the GDP is calculated using a "fixed-weighted" method.
The system is based on the belief that the relative prices of what the U.S. produces and the relative prices of what the U.S. consumes go up or down in tandem.
The "fixed" system also relies heavily on the belief that manufacturing dominates the economy. Today, the United States is now considered a service economy. So, it only makes sense to change the way the USA calculates its' GDP.
By the end of 1995, the government was supposed to have switched from the "fixed" method of GDP calculation to a new "chain-weighted" method.
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The move to the new "chain-weighted" system is all part of the government's effort to retool its economic measures for a new era - one that recognizes business has been globalized, deregulation is increasing business activity and relative prices for goods change quickly and dramatically.
The "chain" system also recognizes that output for computers, telecommunications equipment and health SERVICES is growing much faster than other parts of the economy.
The new "chain" method forces the government to recalibrate the relative prices of these goods - and their relative importance to the economy - every year instead of every 5 years under the "fixed" system.
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drobac@mailcity.com |
Information may be edited before posting.
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