What Are the Different Types of Macroeconomic Variables?

The macroeconomic aggregate of macroeconomic research may be the sum of individual quantities. For example, total consumption is the sum of consumption of each consumer, and total investment is the sum of investment of each manufacturer. It may also be an average quantity, such as the price level is the average of the prices of various commodities. The main macroeconomic variables include gross national product, gross domestic product, consumption, investment, savings rate, currency stock, government budget, unemployment rate, inflation rate, interest rate, exchange rate, and so on. Using these summary measures that characterize economic activity, macroeconomists can describe and analyze the general outline of macroeconomic changes.

Macroeconomic variables

Right!

1. GDP and economic growth

GDP refers to the value of products and services produced within the territory of a country within a certain period (generally annual statistics). In statistics, those that are produced domestically and exported abroad are included. Those that are produced abroad and consumed locally are not counted. The distinction between domestic production and foreign production is generally based on "permanent residents". Only income generated by products and services provided by permanent residents within one year is counted in the country's GDP. Permanent residents are: (1) citizens residing in the country; (2) nationals who reside temporarily in a foreign country; (3) residents who have long resided in the country but have not joined their nationality. Therefore, the gross domestic product of a country refers to the total value of products and services expressed in market prices produced by its residents and foreign residents within a certain period of time within a certain period of time. That is, the sum of the final social output value (or added value) and the value of labor services after subtracting the "net foreign factor income" from the gross national product of a country.

In macroeconomic analysis, GDP indicators occupy a very important position and have a very wide range of uses. The sustained and stable growth of GDP is the goal that the government is pursuing.

Economic growth rate is also called economic growth rate. It is a dynamic indicator that reflects the degree of change in the level of economic development in a certain period of time. It is also a basic indicator that reflects the vitality of a country's economy. For developed countries, the overall level of economic development has reached a considerable level, and it is more difficult to increase the rate of economic development; for developing countries whose economies are still at a low level, due to the large development potential, their economic development speed may Reach high-speed or even ultra-high-speed growth. At this time, we must be vigilant against problems such as inflation of aggregate demand and rising price indices, to avoid causing the macroeconomic overheating situation. Therefore, the goal of moderate economic growth should be pursued.

2. unemployment rate

High employment (or low unemployment) is another important goal pursued by the economy and society. The rise and fall of the unemployment rate is based on the change of GNP relative to potential GNP, which itself is a major problem in modern society. When the unemployment rate is high, resources are wasted, and people's income is reduced. In this period, economic pain will spread to affect people's emotions and family life, and then cause a series of social problems.

3 Inflation

Inflation refers to the continuous rise in the general price level measured by some price index. Inflation is often regarded as the number one enemy of the economy, and politicians and bankers make daily judgments about the dangers of inflation. Governments have taken violent actions to control inflation. So what impact does inflation have on society and the economy?

In general: (1) the redistribution of income and wealth; (2) the nexus between the relative prices and output of different commodities, and sometimes even the distortion of overall output and employment. However, this effect is very complicated, because there are balances and imbalances in inflation, there are expected and unexpected distinctions, and there are two types of mildness, severeness, and malignancy. The impact of mild inflation (annual rate below 10%) on the economy is very limited; severe inflation refers to a wide double-digit space; hyperinflation refers to more than three-digit inflation.

Regardless of the actual or perceived cost of inflation, countries today will not tolerate high inflation rates for a long time. Sooner or later, they have to take steps to reduce inflation, but the adverse effects of monetary and fiscal policies to curb inflation are usually high unemployment and low GNP growth, so the lost output and employment itself The cost of inflation is significant.

4 interest rate

The interest rate or interest rate refers to the ratio of the amount of interest formed during the borrowing period to the amount of funds lent. The interest rate directly reflects the price paid by the debtor to the creditor for the use of funds in the credit relationship, and also the creditor's remuneration for the transfer of the right to use the funds.

From the perspective of macroeconomic analysis, fluctuations in interest rates reflect changes in the market's supply and demand for funds. At different stages of economic development, market interest rates behave differently. During a period of sustained economic prosperity, the supply of funds exceeds demand, and interest rates rise; when the economy is depressed and the market is weak, interest rates will also decline as the demand for funds decreases. In addition to being closely related to the overall economic situation, interest rates are also limited by the increase in prices. With the continuous development of the market economy and the strengthening of the government's macro-control capabilities, interest rates, especially the benchmark interest rate, have become an effective monetary policy tool.

5. exchange rate

The exchange rate is the rate at which foreign currencies exchange with other currencies in the foreign exchange market. In essence, the exchange rate can be viewed as the price of a foreign currency expressed in its own currency.

On the one hand, the exchange rate of a country will fluctuate due to changes in the country's balance of payments, inflation, interest rates, economic growth and other factors; on the other hand, the exchange rate and its appropriate fluctuations will affect the economy of a country. Development plays an important role. Especially under the current situation of extremely developed international division of labor and close economic relations among countries, changes in exchange rates have a significant impact on a country's domestic economy, foreign economy, and international economic relations.

In order to prevent excessive fluctuations in the exchange rate from endangering a country's economic development and coordination of foreign economic relations, governments and central banks of various countries have intervened in the foreign exchange market by selling or purchasing foreign exchange in the foreign exchange market to affect foreign exchange supply and demand, and then the exchange rate. In addition, changes in the government's macroeconomic policies will also directly affect a country's foreign trade structure, inflation level, and real interest rate level, which will have an impact on the exchange rate level.

Since the 1970s, in addition to the frequent intervention of financial authorities in foreign exchange markets in various countries, government intervention has increasingly become an important factor affecting exchange rate changes. There have also been joint interventions of the central banks of several countries in the foreign exchange market. .

6. Fiscal revenue and expenditure

Fiscal revenue and expenditure include fiscal revenue and fiscal expenditure.

Fiscal revenue is the state's concentrated public funding revenue through channels such as taxation in order to ensure the fulfillment of government functions; fiscal expenditures are fiscal funds used to meet the needs of government functions.

The calculation of total fiscal revenue and expenditure is for comparison of fiscal revenue and expenditure. If the income is greater than the expenditure, it is a surplus, and if the income is not offset, a fiscal deficit will occur. If the fiscal deficit is too large, the means of compensation are not enough to balance the revenue and expenditure; or even if the total amount can be barely balanced, but a structural imbalance is formed, it will cause the expansion of total social demand and the imbalance of total social supply and demand.

7. Balance of payments

The balance of payments is a systematic record of all transactions that a resident has with a non-resident in a certain period of time in political, economic, military, cultural, and other transactions. "Residents" here means natural and legal persons who have lived in China for more than one year.

The balance of payments includes current and capital accounts. The current account mainly reflects the status of China's trade and labor exchanges; the capital account focuses on China's exchanges with foreign funds, and reflects the implementation of China's use of foreign capital and repayment of principal. A comprehensive understanding of the balance of payments situation is conducive to planning, forecasting and controlling the country's opening scale and speed from a macro perspective.

8. Scale of investment in fixed assets

The scale of fixed asset investment refers to the amount of capital invested in the reproduction of fixed assets in various sectors and industries of the national economy in a certain period.

Whether the scale of investment is appropriate is a decisive factor affecting economic stability and growth. The investment scale is too small, which is not conducive to laying the material and technological foundation for the further development of the economy; the investment scale arrangement is too large, which exceeds the possibility of human, material and financial resources for a certain period of time, and will cause the imbalance of the national economic ratio, and economic construction will not proceed smoothly , Economic development will rise and fall.

In the period of rising economic growth, special attention must be paid to controlling the scale of investment in fixed assets to prevent the expansion of investment scale. Since reform and opening up, I have shared many lessons in this regard. The phenomenon of blind construction and repeated construction in the field of investment in fixed assets is serious. The blind expansion of investment scales in various places has led to the expansion of total social demand, the serious strain of material supplies and the sharp rise in prices, which has affected the coordinated development of the economy. Do not look back to reduce the scale of investment, resulting in a huge waste of resources. Therefore, proper arrangement of the scale of fixed asset investment is a necessary prerequisite for the rational and efficient operation of the macro economy.