CHAPTER
25
Measuring and Describing
the Aggregate Economy
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reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.
Chapter Goals
• Calculate GDP using the expenditures and
value-added approaches.
• Calculate aggregate income and explain how
it relates to aggregate production.
• Distinguish real from nominal concepts.
• Describe the limitations of using GDP and
national income accounting.
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2
Aggregate Accounting
Aggregate accounting (or national income
accounting) is a set of rules and definitions for
measuring economic activity in the economy as
a whole.
Aggregate accounting is a way of measuring
total, or aggregate production, expenditures,
and income.
Gross domestic product (GDP) is the total
market value of all final goods and services
produced in an economy in a one-year period.
© 2020 McGraw-Hill Education.
3
Calculating GDP
• Calculating GDP requires adding together
millions of different services and products.
• All of the quantities of goods and services
produced are multiplied by their market price
per unit to determine a value measure of the
good or service.
• This is weighting the importance of each
good by its price.
• The sum of all of these values is GDP.
© 2020 McGraw-Hill Education.
4
(Nominal) GDP in thousand TRY, current prices, Turkey
1 600 000 000
1 400 000 000
1 200 000 000
1 000 000 000
800 000 000
600 000 000
400 000 000
200 000 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
© 2020 McGraw-Hill Education.
5
The Components of GDP
GDP is divided into four expenditure categories:
1. Consumption (C) is spending by households on
goods an services.
2. Investment (I) is spending for the purpose of
additional production.
3. Government spending (G) is goods and services
that government buys. Transfer payments are
not included (Social Security, etc.)
4. Net exports is spending on exports (X) minus
spending on imports (M).
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6
The Components of GDP
Since all production is categorized into one of
these four divisions, by adding up these four
categories, we get total production of goods and
services
GDP = Consumption
+ Investment
+ Government spending
+ Net exports
GDP = C + I + G + (X – M)
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7
Expenditure Breakdown of GDP
GDP (billions $)
= C (%)
+ I (%)
+ G (%)
+ X (%)
- I (%)
U.S.
19,485
69
17
17
12
15
China
25,240
39
44
15
20
18
Germany
4,370
53
20
17
47
40
Japan
5,620
56
24
20
16
15
Mexico
2,570
65
24
12
37
39
Nigeria
1,170
79
15
7
13
14
Poland
1,190
59
20
18
54
50
Country
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8
Expenditure Breakdown of GDP, Turkey
Gayrisafi yurtiçi hasıla, harcama yöntemiyle cari fiyatlarla (değer, pay, değişim oranı), 1998-2019
Gross domestic product at current prices by expenditure approach (value, share, percentage change), 1998-2019
Gayrisafi yurtiçi hasıla
Gross domestic product
Değer
Value
(Bin TL)
(Thousand
TRY)
Pay
Share
(%)
Yerleşik hanehalkı nihai tüketim
harcaması
Resident households final
consumption expenditure
Hanehalkına hizmet eden kar
amacı olmayan kuruluşların
nihai tüketim harcaması
Non-profit institutions serving
households final consumption
expenditure
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
Devletin nihai tüketim
harcamaları
Government final consumption
expenditure
Gayrisafi sabit sermaye
oluşumu
Gross fixed capital formation
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
Stok değişmeleri
Change in stocks
Mal ve hizmet ihracatı
Exports of goods and services
(Eksi) Mal ve hizmet ithalatı
(Less) Imports of goods and
services
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
Değer
Value
(Bin TL)
(Thousand TRY)
Pay
Share
(%)
1998
71 944 700
100.0
46 220 686
64.2
233 198
0.3
7 635 652
10.6
16 872 453
23.5
308 554
0.4
14 868 257
20.7
14 194 100
19.7
1999
107 374 258
100.0
70 560 059
65.7
345 205
0.3
13 602 775
12.7
21 346 316
19.9
1 566 179
1.5
20 198 078
18.8
20 244 353
18.9
2000
171 494 210
100.0
114 222 183
66.6
584 921
0.3
20 456 956
11.9
38 091 183
22.2
2 584 164
1.5
34 095 105
19.9
38 540 302
22.5
2001
247 266 207
100.0
159 518 438
64.5
799 664
0.3
31 269 090
12.6
44 385 051
18.0
185 756
0.1
67 211 757
27.2
56 103 548
22.7
2002
362 109 648
100.0
229 819 815
63.5
1 310 791
0.4
46 479 185
12.8
70 519 752
19.5
5 912 866
1.6
90 908 058
25.1
82 840 820
22.9
2003
472 171 775
100.0
306 456 151
64.9
1 936 703
0.4
59 448 404
12.6
97 636 341
20.7
7 698 683
1.6
108 628 679
23.0
109 633 186
23.2
2004
582 852 799
100.0
372 637 116
63.9
2 017 262
0.3
71 779 491
12.3
146 751 505
25.2
- 1 144 881
-0.2
137 697 535
23.6
146 885 229
25.2
2005
680 275 847
100.0
429 142 887
63.1
2 153 584
0.3
82 898 243
12.2
179 663 286
26.4
2 675 229
0.4
148 818 965
21.9
165 076 346
24.3
2006
795 757 109
100.0
488 586 240
61.4
2 531 011
0.3
102 712 569
12.9
226 558 851
28.5
6 985 485
0.9
178 208 483
22.4
209 825 530
26.4
2007
887 714 414
100.0
548 251 108
61.8
2 847 122
0.3
118 862 212
13.4
247 562 636
27.9
6 336 984
0.7
194 316 475
21.9
230 462 123
26.0
2008
1 002 756 496
100.0
609 322 255
60.8
3 165 081
0.3
136 337 707
13.6
267 249 924
26.7
20 932 403
2.1
236 312 513
23.6
270 563 387
27.0
2009
1 006 372 482
100.0
616 268 434
61.2
3 379 911
0.3
157 576 388
15.7
223 710 604
22.2
5 906 805
0.6
235 191 253
23.4
235 660 914
23.4
2010
1 167 664 479
100.0
728 542 463
62.4
3 339 434
0.3
173 684 929
14.9
287 659 501
24.6
24 720 103
2.1
247 476 366
21.2
297 758 318
25.5
2011
1 404 927 615
100.0
876 891 714
62.4
4 181 769
0.3
191 075 146
13.6
389 783 787
27.7
45 790 565
3.3
323 044 859
23.0
425 840 225
30.3
2012
1 581 479 251
100.0
974 963 381
61.6
4 131 515
0.3
223 401 702
14.1
427 923 207
27.1
16 043 245
1.0
385 262 192
24.4
450 245 990
28.5
2013
1 823 427 315
100.0
1 113 709 998
61.1
4 113 568
0.2
255 615 056
14.0
516 877 496
28.3
23 211 842
1.3
433 848 234
23.8
523 948 880
28.7
2014
2 054 897 828
100.0
1 235 234 528
60.1
5 261 562
0.3
288 096 259
14.0
590 695 415
28.7
4 556 360
0.2
517 948 129
25.2
586 894 426
28.6
2015
2 350 941 343
100.0
1 403 965 136
59.7
7 107 809
0.3
324 551 507
13.8
694 810 520
29.6
- 31 863 818
-1.4
576 715 941
24.5
624 345 752
26.6
2016
2 626 559 710
100.0
1 551 853 995
59.1
8 541 826
0.3
386 976 636
14.7
764 545 129
29.1
- 28 593 510
-1.1
606 302 150
23.1
663 066 518
25.2
2017
3 133 704 267
100.0
1 826 538 069
58.3
10 089 982
0.3
450 634 678
14.4
935 634 627
29.9
26 231 396
0.8
815 998 489
26.0
931 422 972
29.7
2018
3 758 315 621
100.0
2 097 979 181
55.8
13 016 470
0.3
551 962 054
14.7
1 114 729 518
29.7
- 14 197 119
-0.4
1 172 777 238
31.2
1 177 951 721
31.3
2019
4 320 191 227
100.0
2 441 172 278
56.5
15 867 077
0.4
670 808 742
15.5
1 117 609 569
25.9
- 46 229 422
-1.1
1 414 491 281
32.7
1 293 528 298
29.9
Total expenditure =GDP= G+C+I+X-M
9
GDP is a Flow Concept
GDP is a flow concept, the market value of total
final output a country produces per year (all
components of GDP are flow variables:
consumption is a flow, Investment is a flow,
government spending is a flow, saving is a flow).
Wealth accounts are a balance sheet of an
economy’s assets and liabilities and it is a stock
concept (e.g. saving accrues into wealth stock;
Investment accrues into capital stock).
© 2020 McGraw-Hill Education.
10
GDP Measures Final Output
GDP does not measure total transactions in the
economy.
It counts final output, but not intermediate goods.
• Final output is goods and services
purchased for final use.
• Intermediate products are used as an input
in the production of some other product.
Counting the sale of both final and intermediate
goods would result in double counting.
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11
Two Ways of Eliminating Intermediate Goods
Calculate only final output.
• A firm would report how much it sold to
consumers and how much it sold to producers
(intermediate goods).
Follow the value added approach.
• Value added is the increase in value that a firm
contributes to a product or service.
• It is calculated by subtracting intermediate
goods (the cost of materials that a firm uses to
produce a good or service) from the value of
its sales.
© 2020 McGraw-Hill Education.
12
Value Added Approach Example:
Ice Cream Production
Participants
Cost of Materials ($)
Value of Sales ($)
Value Added ($)
0
100
100
Cone factory and
ice cream maker
100
250
150
Middleperson
(final sales)
250
400
150
Vendor
400
500 (final good
sale)
100
Farmer
Totals
750
1,250
© 2020 McGraw-Hill Education.
500
13
What Is Counted in GDP?
Not Counted
Counted
• Secondhand sales
• Value added by a used car dealer
(counted as service)
• Sales of stocks or bonds
• Commissions paid to stock brokers
(counted as service)
• Government transfer payments
• Work of house-spouses
Only production of goods and services enters the calculation of GDP!!
What about unsold goods in a given year? They enter into inventory, as
part of Investment category for that year!!
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14
Gross and Net Concepts
Net domestic product (NDP) is GDP adjusted for
depreciation.
Depreciation is the amount of capital used up in
producing that year’s GDP (expenditure on the
wear and tear-maintenance of existing capital
used in production).
NDP measures output available for purchase.
NDP = C + I + G + (X – M) – depreciation
Net Investment is gross investment minus
depreciation.
© 2020 McGraw-Hill Education.
15
GNP VERSUS GDP
• GDP by definition, is the total income generated
domestically. GDP includes income earned
domestically by foreigners (working within the
country), but it does not include income earned
by nationals abroad.
• GNP (Gross National Product) is the total income
earned by nationals. GNP includes the income
that nationals earn abroad, but it does not
include the income earned within a country by
foreigners.
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GNP VERSUS GDP
• GDP
Plus: receipts of factor income from the rest of
the world (income from foreign domestic
factor sources)
Minus: payments of factor income to the rest
of the world (foreign factor income earned
domestically)
=GNP
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National and Domestic Concepts
GDP is the total value of all final goods and services
produced in an economy in a one-year period.
• GDP is output produced (and income generated)
within a country’s borders.
Gross National Product (GNP) is the aggregate final output
of citizens and businesses of an economy in one year.
• GNP is output produced (and income generated)
by a country’s citizens.
• GNP = GDP + Net foreign factor income
Net foreign factor income is the income from foreign
domestic factor sources minus foreign factor income
earned domestically.
© 2020 McGraw-Hill Education.
18
Calculating Aggregate Income
Aggregate income is the total income earned by
citizens and businesses in a country in a year.
Aggregate income consists of:
• Employee compensation
• Rent
• Interest
• Profits
Aggregate income = Employee compensation +
Rents + Interest + Profits
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19
Equality of Aggregate Income and
Aggregate Production
Whenever a good or service is produced (output), somebody
receives an income for producing it.
Aggregate Income ≡ Aggregate Production value
Profit is what remains after all the firm’s other income
(employee compensation, rent and interest) is paid out.
This aggregate accounting identity allows us to calculate GDP
either by adding up all values of final outputs (C, I, G, net
exports) or by adding up the values of all earnings or income.
As globalization has expanded, net exports have become
increasingly important.
© 2020 McGraw-Hill Education.
20
National Income Equality
Output
Income
Consumption
Employee Compensation
Investment
Rent
Government Spending
Interest
Net Exports
Profit
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21
Inflation: Distinguishing Real from Nominal
Inflation is a continual rise in the overall price
level.
Price Index is a measure of the composite price
of a specified group of goods.
Nominal GDP is the amount of goods and
services produced measured at current prices.
Real GDP is the total amount of goods and
services produced, adjusted for price-level
changes.
© 2020 McGraw-Hill Education.
22
NOMINAL GDP VERSUS REAL GDP
Data for GDP Example
Quantity in year 1
Price in year 1
Quantity in year 2
Price in year 2
Apples
Oranges
50
100
TL 1.00
TL 0.80
80
120
TL 1.25
TL 1.60
Nominal GDP = Current quantity × Current price
Nominal GDP (year 1) = (1.00 × 50) + (0.80 × 100) = TL 130
NominalGDP (year 2) = (1.25 × 80) + (1.60 × 120) = TL 292
4.12.2023
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NOMINAL GDP VERSUS REAL GDP
• Annual growth rate in Nominal GDP

Y (new)  Y (old )
100
Y (old )
=124.6%
This 124.6% increase may be due to increase in
prices, output, or both..
4.12.2023
24
(Nominal) GDP in thousand TRY, current prices
1 600 000 000
1 400 000 000
1 200 000 000
1 000 000 000
800 000 000
600 000 000
400 000 000
200 000 000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
© 2020 McGraw-Hill Education.
25
NOMINAL GDP VERSUS REAL GDP
• Real GDP: measures the value of output at a
given year at constant (base year) prices, hence if
there is any increase or change in prices, it
cannot affect the value of output.
• Let year 1 is the base year for prices. Take base
year prices in calculation of Real GDP:
• Real GDP (year 1)= 130
• Real GDP (year 2)=(1.00x80)+(0.80x120)=176
176 − 130
=
× 100
• Given the real GDP, rate of growth is
130
= 35.4%
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26
Real GDP, Thousand TL, 2009=100; Turkey
2 000 000 000
1 800 000 000
1 600 000 000
1 400 000 000
1 200 000 000
1 000 000 000
800 000 000
600 000 000
400 000 000
200 000 000
0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Source: TurkSTAT
27
𝑦𝑡 −𝑦𝑡−1
Real GDP growth rate=
𝑦𝑡−1
× 100
28
Real GDP annual growth rate (%), Turkey
11,2
9,8
9,0
6,9
6,4
8,5
8,4
7,5
6,9
6,1
5,8
5,0
4,8
4,9
3,3
0,8
3,0
0,9
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
-3,3
-4,8
-5,8
Source: TurkSTAT
29
PRICE INDICES AND INFLATION
Nominal GDP
GDP Deflator 
100
Real GDP
Nominal GDP  GDP Deflator  Real GDP
130
× 100
130
= 100
GDP Deflator (year 1) =
292
× 100
176
= 165,9
GDP Deflator (year 2) =
4.12.2023
30
PRICE INDICES AND INFLATION
GDP Deflator =
GDP Deflator =
Nominal GDP
× 100
Real GDP
𝑛
𝑖=1(𝑃𝑖,𝑡
× 𝑄𝑖,𝑡 )
× 100
𝑛
(𝑃
×
𝑄𝑖,
𝑡)
𝑖=1 𝑖,𝑏𝑎𝑠𝑒
GDP Deflator (year 1) =
GDP Deflator (year 2) =
4.12.2023
130
× 100 = 100
130
292
× 100 = 165,9
176
31
GDP DEFLATOR AND INFLATION
• Inflation based on GDP Deflator:
 GDP 
PGDP (year2)  PGDP (year1)
100
PGDP (year1)
165,9  100
100
100
 65,9%

Inflation is calculated based on CONSECUTIVE year values.
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32
PRICE INDICES AND INFLATION
GUNS
BUTTER
Price
Quantity
Price
Quantity
2010
TL 10
25 units
TL 4
40 units
2011
TL 15
30 units
TL 6
42 units
Nominal GDP (2010)= (10x25) + (4x40) = 410 TL
Nominal GDP (2011)= (15x30) + (6x42) = 702 TL
Let 2010 is the base year for prices:
Real GDP (2010) = (10x25) + (4x40) = 410 TL
Real GDP (2011) = (10 x 30) + (4 x 42) = 468 TL
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PRICE INDICES AND INFLATION
• GDP Deflator (2010)= 100
• GDP Deflator (2011)  702 100
468
 150
Inflation based on GDP Deflator is 50 % from
2010 to 2011
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34
CONSUMER PRICE INDEX (CPI)
• Consumer price index (CPI) measures the
value of a certain basket of goods and services
in a given period (month, year, etc.) relative to
the value of the same basket in some base
year.
• In calculating the CPI for a given year, we have
a FIXED basket of goods and services (at some
base year quantities), and we measure only
the price changes.
 (P  Q )
n
CPI 
4.12.2023
i 1
n
i ,t
i ,base
i ,base
 Qi ,base )
 (P
i 1
100
35
CONSUMER PRICE INDEX (CPI)
(10  25)  (4  40)
100  100
(10  25)  (4  40)
(15  25)  (6  40)
CPI (2011) 
100  150
(10  25)  (4  40)
CPI (2010) 
 CPI
4.12.2023
150  100

100  50%
100
36
GDP DEFLATOR VERSUS CPI
• GDP Deflator uses a changing basket from one period
to the next, while the CPI uses a fixed basket.
• GDP Deflator and CPI need not be the same, however
most of the time they move together.
• GDP is the price index for ALL goods and services
produced within the borders of a country (including
consumer goods, investment goods, government goods
such as the price of asphalt..)
• Whereas CPI is the price index only for consumer
goods, which also includes IMPORTED consumer
goods’ prices.
4.12.2023
37
Real versus Nominal GDP
GDP deflator is the price index that includes all
goods and services in the economy expressed
relative to a base year of 100.
Example: GDP rises 10%, from $16 trillion to
$17.6 trillion. How much of that 10% is real?
If prices have risen 5%, that means the GDP
deflator has increased from 100 to 105 (100 + 5).
Real GDP = $17.6 ÷ 105 × 100 = $16.76 trillion
© 2020 McGraw-Hill Education.
38
Other Real-World Price Indexes
Consumer Price Index (CPI) measures the prices of a
fixed basket of goods, weighted according to each
component’s share of an average consumer’s
expenditures.
Personal Consumption Expenditure Deflator (PCE) is a
measure of prices of goods that consumers buy that
allows yearly changes in the basket of goods that
reflect actual consumer purchasing habits.
Producer Price Index (PPI) is an index of prices that
measures the average change in the selling prices
received by domestic producers of goods and services
over time.
© 2020 McGraw-Hill Education.
39
Tüketici fiyat endeks rakamları (2003=100)
Consumer price index numbers (2003=100)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ocak
January
94.77
104.81
114.49
123.57
135.84
146.94
160.90
174.07
182.60
201.98
216.74
233.54
250.45
274.44
299.74
330.75
398.07
446.45
Şubat
February
96.23
105.35
114.51
123.84
136.42
148.84
160.35
176.59
183.93
203.12
217.39
234.54
252.24
274.38
302.17
333.17
398.71
448.02
Mart
March
98.12
106.36
114.81
124.18
137.67
150.27
162.12
177.62
184.70
203.96
218.83
237.18
255.23
274.27
305.24
336.48
402.81
450.58
Nisan
April
99.09
106.89
115.63
125.84
139.33
152.79
162.15
178.68
186.30
207.05
219.75
240.37
259.39
276.42
309.23
342.78
409.63
454.43
Mayıs
May
100.04
107.35
116.69
128.20
140.03
155.07
163.19
178.04
190.81
206.61
220.07
241.32
260.85
278.02
310.61
348.34
413.52
460.62
Haziran
June
100.12
107.21
116.81
128.63
139.69
154.51
163.37
177.04
188.08
204.76
221.75
242.07
259.51
279.33
309.78
357.44
413.63
465.84
Temmuz
July
99.93
107.72
116.14
129.72
138.67
155.40
163.78
176.19
187.31
204.29
222.44
243.17
259.74
282.58
310.24
359.41
419.24
468.56
Ağustos
Eylül
August September
100.09
101.44
108.54
109.57
117.13
118.33
129.15
130.81
138.70
140.13
155.02
155.72
163.29
163.93
176.90
179.07
188.67
190.09
205.43
207.55
222.21
223.91
243.40
243.74
260.78
263.11
281.76
282.27
311.85
313.88
367.66
390.84
422.84
427.04
472.61
Ekim
October
102.38
112.03
120.45
132.47
142.67
159.77
167.88
182.35
196.31
211.62
227.94
248.37
267.20
286.33
320.40
401.27
435.59
Kasım
November
103.68
113.50
122.14
134.18
145.45
161.10
170.01
182.40
199.70
212.42
227.96
248.82
268.98
287.81
325.18
395.48
437.25
Aralık
December
104.12
113.86
122.65
134.49
145.77
160.44
170.91
181.85
200.85
213.23
229.01
247.72
269.54
292.54
327.41
393.88
440.50
Mart
March
1.96
0.96
0.26
0.27
0.92
0.96
1.10
0.58
0.42
0.41
0.66
1.13
1.19
-0.04
1.02
0.99
1.03
0.57
Nisan
April
0.99
0.49
0.71
1.34
1.21
1.68
0.02
0.60
0.87
1.52
0.42
1.34
1.63
0.78
1.31
1.87
1.69
0.85
Mayıs
May
0.96
0.44
0.92
1.88
0.50
1.49
0.64
-0.36
2.42
-0.21
0.15
0.40
0.56
0.58
0.45
1.62
0.95
1.36
Haziran
June
0.08
-0.14
0.10
0.34
-0.24
-0.36
0.11
-0.56
-1.43
-0.90
0.76
0.31
-0.51
0.47
-0.27
2.61
0.03
1.13
Temmuz
July
-0.19
0.47
-0.57
0.85
-0.73
0.58
0.25
-0.48
-0.41
-0.23
0.31
0.45
0.09
1.16
0.15
0.55
1.36
0.58
Ağustos
Eylül
August September
0.16
1.35
0.77
0.94
0.85
1.02
-0.44
1.29
0.02
1.03
-0.24
0.45
-0.30
0.39
0.40
1.23
0.73
0.75
0.56
1.03
-0.10
0.77
0.09
0.14
0.40
0.89
-0.29
0.18
0.52
0.65
2.30
6.30
0.86
0.99
0.86
Ekim
October
0.92
2.24
1.79
1.27
1.81
2.60
2.41
1.83
3.27
1.96
1.80
1.90
1.55
1.44
2.08
2.67
2.00
Kasım
November
1.27
1.32
1.40
1.29
1.95
0.83
1.27
0.03
1.73
0.38
0.01
0.18
0.67
0.52
1.49
-1.44
0.38
Aralık
December
0.43
0.32
0.42
0.23
0.22
-0.41
0.53
-0.30
0.58
0.38
0.46
-0.44
0.21
1.64
0.69
-0.40
0.74
Aylık değişim (%)
Monthly rate of change (%)
Ocak
January
Source: TurkSTAT
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0.66
0.55
0.75
1.00
0.80
0.29
1.85
0.41
0.56
1.65
1.98
1.10
1.82
2.46
1.02
1.06
1.35
Şubat
February
1.54
0.52
0.02
0.22
0.43
1.29
-0.34
1.45
0.73
0.56
0.30
0.43
0.71
-0.02
0.81
0.73
0.16
0.35
40
Bir önceki yılın aralık ayına göre değişim (%)
Rate of change on december of the previous year (%)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ocak
January
Şubat
February
Mart
March
Nisan
April
Mayıs
May
Haziran
June
Temmuz
July
0.66
0.55
0.75
1.00
0.80
0.29
1.85
0.41
0.56
1.65
1.98
1.10
1.82
2.46
1.02
1.06
1.35
1.18
0.57
0.97
1.44
2.11
-0.06
3.32
1.14
1.13
1.95
2.41
1.82
1.80
3.29
1.76
1.23
1.71
2.15
0.83
1.25
2.36
3.09
1.05
3.93
1.57
1.55
2.63
3.57
3.03
1.75
4.34
2.77
2.27
2.29
2.65
1.55
2.60
3.60
4.82
1.07
4.55
2.45
3.09
3.06
4.96
4.71
2.55
5.71
4.69
4.00
3.16
3.10
2.49
4.53
4.12
6.38
1.71
4.17
4.93
2.87
3.21
5.38
5.30
3.15
6.18
6.39
4.99
4.57
2.96
2.59
4.88
3.87
6.00
1.83
3.59
3.43
1.95
4.00
5.70
4.76
3.63
5.89
9.17
5.01
5.75
3.45
2.00
5.76
3.11
6.61
2.08
3.09
3.00
1.71
4.32
6.18
4.85
4.84
6.05
9.77
6.44
6.37
Ağustos
Eylül
August September
Ekim
October
Kasım
November
Aralık
December
5.23
3.93
6.65
4.19
6.83
2.18
4.77
4.53
3.34
5.01
6.43
6.21
4.72
7.29
19.37
8.42
7.59
5.79
8.01
6.08
9.60
4.64
6.69
7.95
5.36
6.90
8.45
7.86
6.23
9.52
22.56
10.59
9.00
7.27
9.40
8.15
10.52
5.96
6.72
9.82
5.76
6.91
8.65
8.58
6.78
11.16
20.79
11.01
9.35
7.72
9.65
8.39
10.06
6.53
6.40
10.45
6.16
7.40
8.17
8.81
8.53
11.92
20.30
11.84
Ağustos
Eylül
August September
Ekim
October
Kasım
November
Aralık
December
9.43
7.52
9.98
7.70
11.99
5.08
8.62
7.66
7.80
7.71
8.96
7.58
7.16
11.90
25.24
8.55
9.47
7.61
9.86
8.40
10.76
5.53
7.29
9.48
6.37
7.32
9.15
8.10
7.00
12.98
21.62
10.56
9.35
7.72
9.65
8.39
10.06
6.53
6.40
10.45
6.16
7.40
8.17
8.81
8.53
11.92
20.30
11.84
4.25
2.87
5.30
3.13
6.35
1.78
3.50
3.75
2.28
4.21
6.28
5.27
4.53
6.60
12.29
7.35
7.29
Yıllık değişim (Bir önceki yılın aynı ayına göre değişim) (%)
Annual rate of change (%)
Source: TurkSTAT
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ocak
January
Şubat
February
Mart
March
Nisan
April
Mayıs
May
Haziran
June
Temmuz
July
10.59
9.23
7.93
9.93
8.17
9.50
8.19
4.90
10.61
7.31
7.75
7.24
9.58
9.22
10.35
20.35
12.15
9.48
8.69
8.15
10.16
9.10
7.73
10.13
4.16
10.43
7.03
7.89
7.55
8.78
10.13
10.26
19.67
12.37
8.40
7.94
8.16
10.86
9.15
7.89
9.56
3.99
10.43
7.29
8.39
7.61
7.46
11.29
10.23
19.71
11.86
7.87
8.18
8.83
10.72
9.66
6.13
10.19
4.26
11.14
6.13
9.38
7.91
6.57
11.87
10.85
19.50
10.94
7.31
8.70
9.86
9.23
10.74
5.24
9.10
7.17
8.28
6.51
9.66
8.09
6.58
11.72
12.15
18.71
11.39
7.08
8.95
10.12
8.60
10.61
5.73
8.37
6.24
8.87
8.30
9.16
7.20
7.64
10.90
15.39
15.72
12.62
7.79
7.82
11.69
6.90
12.06
5.39
7.58
6.31
9.07
8.88
9.32
6.81
8.79
9.79
15.85
16.65
11.76
8.45
7.91
10.26
7.39
11.77
5.33
8.33
6.65
8.88
8.17
9.54
7.14
8.05
10.68
17.90
15.01
11.77
8.01
7.99
10.55
7.12
11.13
5.27
9.24
6.15
9.19
7.88
8.86
7.95
7.28
11.20
24.52
9.26
41
Oniki aylık ortalamalara göre değişim (%)
Rate of change in twelve months moving averages (%)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Ocak
January
Şubat
February
Mart
March
Nisan
April
Mayıs
May
Haziran
June
Temmuz
July
8.50
8.07
9.76
8.61
10.54
6.16
8.28
6.95
8.62
7.53
8.80
7.87
7.76
11.23
17.16
14.52
8.44
8.03
9.92
8.53
10.41
6.38
7.76
7.48
8.33
7.60
8.77
7.97
7.88
11.23
17.93
13.94
8.40
8.05
10.15
8.40
10.29
6.53
7.29
8.02
8.08
7.70
8.70
7.96
8.21
11.14
18.70
13.33
8.42
8.11
10.30
8.33
9.98
6.87
6.79
8.59
7.66
7.97
8.57
7.84
8.66
11.06
19.39
12.66
8.53
8.21
10.24
8.47
9.49
7.20
6.64
8.68
7.51
8.23
8.45
7.71
9.09
11.10
19.91
12.10
8.69
8.32
10.11
8.64
9.08
7.41
6.47
8.89
7.47
8.31
8.28
7.74
9.36
11.49
19.88
11.88
8.68
8.64
9.70
9.07
8.52
7.59
6.37
9.11
7.47
8.35
8.07
7.91
9.44
12.00
19.91
11.51
Ağustos
Eylül
August September
8.64
8.84
9.46
9.43
7.99
7.83
6.24
9.29
7.42
8.46
7.88
7.98
9.66
12.61
19.62
11.27
8.63
9.05
9.17
9.76
7.52
8.16
6.00
9.53
7.32
8.54
7.80
7.92
9.98
13.75
18.27
Ekim
October
Kasım
November
Aralık
December
8.47
9.25
8.98
10.12
6.95
8.45
5.93
9.53
7.32
8.65
7.69
7.89
10.37
14.90
16.81
8.31
9.44
8.86
10.31
6.53
8.59
6.13
9.26
7.39
8.80
7.61
7.79
10.87
15.63
15.87
8.60
8.18
9.60
8.76
10.44
6.25
8.57
6.47
8.89
7.49
8.85
7.67
7.78
11.14
16.33
15.18
Source: TurkSTAT
42
Other Real and Nominal Distinctions
Nominal interest rate is the rate you pay or receive to
borrow or lend money.
Real interest rate is the nominal interest rate adjusted for
inflation.
Real wealth is the value of the productive capacity of the
assets of an economy measured by the goods and services
it can produce now and in the future.
Nominal wealth is the value of those assets measured at
their current market prices.
Asset price inflation is a rise in the price of assets unrelated
to increases in their productive capacity.
43
© 2020 McGraw-Hill Education.
Some Limitations of Aggregate Accounting
Per capita GDP can be misused in comparing
various countries’ living standards.
Because of differences in nonmarket activities
and difference in product prices, per capita GDP
may be a misleading measure of living
standards.
Purchasing power parity is a method of
comparing income that takes into account the
different relative prices among countries.
© 2020 McGraw-Hill Education.
44
Some Limitations of Aggregate Accounting
GDP measures neither happiness nor economic
welfare
Measurements inflation can involve significant
measurement errors.
Possible misinterpretation of the components.
For example, the line between consumption and
investment may be unclear.
© 2020 McGraw-Hill Education.
45
Some Limitations of Aggregate Accounting
Measurement is necessary, and the GDP
measurements and categories have made it
possible to think and talk about the aggregate
economy.
The genuine progress indicator (GPI) makes a
variety of adjustments to GDP to better measure
the progress of society rather than just
economic activity.
The GPI includes social goals such as pollution
reduction, education, and health.
© 2020 McGraw-Hill Education.
46
Chapter Summary (1 of 4)
Aggregate accounting is a set of rules and definitions
for measuring economic activity in the aggregate
economy.
GDP is the total market value of all final goods and
services produced in an economy in one year.
GDP is divided up into four types of expenditures: GDP
= Consumption + Investment + Government spending +
Net exports
Intermediate goods can be eliminated from GDP in two
ways: 1. By measuring only final sales. 2. By measuring
only value added.
© 2020 McGraw-Hill Education.
47
Chapter Summary (2 of 4)
Net domestic product = GDP – depreciation.
GNP describes the economic output produced by the
citizens of a country.
Aggregate income = GDP = Compensation of employees
+ Rent + Interest + Profit
The stock equivalent of the national income accounts is
the national wealth accounts.
Aggregate income equals aggregate production
because whenever a good is produced, somebody
receives income for producing it, and profit is key to
that equality.
© 2020 McGraw-Hill Education.
48
Chapter Summary (3 of 4)
The United States has a trade deficit. Total spending by
U.S. citizens is greater than production in the United
States.
To compare income over time, we must adjust for
price-level changes. After adjusting for inflation,
nominal measures are changed to “real” measures.
Real GDP = Nominal GDP ÷ GDP deflator × 100
The percentage change in real GDP equals the
percentage change in nominal GDP minus inflation.
© 2020 McGraw-Hill Education.
49
Chapter Summary (4 of 4)
Inflation is a continual rise in the price level.
To compare income over time, we must adjust for price-level
changes and obtain “real” measures using either CPI, PPI, PCE
deflator or GDP deflator.
Real interest rate = Nominal interest rate – Inflation
GDP has its problems:
It is difficult to compare across countries.
GDP does not measure economic welfare.
It does not include transactions in the underground
economy.
© 2020 McGraw-Hill Education.
50