Understand economics from scratch

Chapter 35 How to Gain Insight into the General Economic Trend from Financial News—Economics You Need to Learn to Understand Financial News (1)
Lord Kelvin said: "When you can measure what you're talking about and express it in numbers, you really know something about it; and when you can't measure it and express it in numbers , your understanding is superficial and unsatisfactory. This understanding may be the beginning of cognition, but it is hard to say that you have entered the stage of science in thought."

Every day when people surf the Internet, turn on the TV, and pick up newspapers, there will be a lot of financial news. If you can understand these financial news, you will be able to gain insight into the general economic trend of China and the world, and your cognition will be able to step into Kaifa. What Lord Irwin called "the stages of science".

Green GDP: Why GDP is in doubt
Going for a walk after dinner one day, the two young men fought for the proof of a certain mathematical model.When it was hard to decide, I suddenly found a pile of dog poop on the grass in front of me.A said to B, if you can eat it, I am willing to pay 5000 million yuan. The temptation of 5000 million yuan is really not small, to eat or not to eat?B took out a pen and paper, performed precise mathematical calculations, and quickly came up with the optimal solution in economics: eat!So A lost 5000 million yuan. Of course, B's extra meal was not easy.

The two continued to walk, and suddenly found another pile of shit. At this time, B began to have a strong nausea, and A also felt a little bit sorry for the 5000 million yuan he had just spent.So B said, if you eat it, I will give you 5000 million yuan.So, different calculation methods, the same calculation result - eat!A took back 5000 million yuan contentedly, and B seemed to have found a little psychological balance.

But suddenly, the geniuses wailed at the same time: "We got nothing after making trouble for a long time, but ate two piles of shit for nothing!" explain.

Hearing the story of the two master disciples, he did not expect that the master would also burst into tears.Finally, when the mood stabilized a bit, the master raised a finger tremblingly, and said with great excitement: "1 million yuan! 1 million yuan! My dear classmates, thank you, you only ate two A pile of shit contributed 1 million yuan to the country's GDP!"

It is a ridiculous thing that eating shit can create GDP.Apart from being ridiculous, we should first understand what GDP is. GDP is the abbreviation of gross domestic product in English, which means gross domestic product.GDP is usually defined as: the total value of the market value of all final products and labor services produced in the economy of a country or region within a certain period of time (one quarter or one year).

In economics, GDP is often used as a general indicator to measure the comprehensive level of economic development of a country or region, which is also a commonly used measurement method in various countries and regions. GDP is the most concerned economic statistic in macroeconomics, because it is considered to be the most important indicator to measure the development of the national economy.Generally speaking, there are three forms of GDP, namely value form, income form and product form.From the perspective of value form, it is the difference between the value of all goods and services produced by all resident units within a certain period of time and the value of all non-fixed asset goods and services invested in the same period, that is, the sum of the added value of all resident units; In terms of form, it is the sum of the income directly created by all resident units within a certain period of time; in terms of product form, it is the goods and services for final use minus imported goods and services. GDP reflects the total value added of all sectors of the national economy.

In the past 30 years, China has been one of the countries with the fastest economic growth in the world. However, due to the waste of resources, the degradation of ecology and the aggravation of environmental pollution, the achievements of economic growth have been offset to a large extent.

For a long time, some local governments have always put GDP first, often ignoring environmental protection.Because emphasizing environmental protection requires investment, many projects cannot be started, which will affect the growth of GDP.Under the guidance of the idea of ​​"emphasizing development and ignoring environmental protection", some leaders even asked the environmental protection department to give the green light to illegal construction.

In order to correctly measure my country's economic aggregate and correctly guide the economic growth mode, my country is actively promoting the calculation method of green GDP.Green GDP refers to the final result of a country or region's economic activities after considering the impact of natural resources (mainly including land, forests, minerals, water and oceans) and environmental factors (including ecological environment, natural environment, human environment, etc.). The resource depletion costs and environmental degradation costs paid in economic activities are deducted from GDP.Reform the current national economic accounting system, calculate environmental resources, deduct the cost of environmental resources and the cost of protection services for environmental resources from the current GDP, and the calculation result can be called green GDP.Green GDP can be expressed as:

Green GDP = Total GDP - (Environmental resource cost + Environmental resource protection service fee)

Through the pilot project of green GDP, we can outline an increasingly clear blueprint: the people need a comfortable and comfortable living space, and the country should take a sustainable and healthy development path.

Gini Coefficient: Why Not Too High

Xiao Lu, who works in a bank, has an annual salary of more than 3 yuan in the first year, plus the usual bonus and year-end bonus, the annual income can reach more than 4 yuan; and Xiao Lu’s classmate Xiao Li, who works in a foreign trade company For clerical work, the monthly salary is only 1500 yuan, and there is no year-end bonus in the first year.

Xiao Ou and Xiao Shi, graduates of the 2007 class, are working in Shenzhen and Fuzhou respectively.Xiao Ou works in an advertising company in Shenzhen with a monthly salary of 4500 yuan; Xiao Shi works in the same industry and the same type of work in Fuzhou with a monthly salary of 2000 yuan.

"Why are their wages so high? Why do many units raise their wages every year, but our unit has not increased for several years?" Talking about wages, many people complained.The average annual salary in industries such as securities, banking, and air transportation is more than 10 yuan, while that in industries such as textiles is less than 2 yuan.Where is the "root cause" of wages?What causes the income gap to widen, which in turn leads to the widening gap between the rich and the poor?
In order to study the distribution of national income among nationals, American statistician (or Austrian statistician) M. O. Lorenz (Max Otto Lorenz) proposed the famous Lorenz from 1903 to 1907 (or 1905). Renz curve.

Draw a rectangle, the height of the rectangle measures the percentage of social wealth, and divides it into 5 equal parts, each of which is divided into 20 of the total social wealth.On the length of the rectangle, the 100-point families are arranged from the poorest to the richest, left to right, and divided into 5 equal parts. The first equal part represents the 20 families with the lowest income.In this rectangle, the percentage of wealth owned by each 100-point family is accumulated, and the corresponding points are drawn on the graph, and a curve is obtained, which is the Lorenz curve.

The Lorenz curve is used to compare and analyze the wealth inequality of a country in different eras or in different countries in the same era. The curve is widely used as a convenient graphical method for summarizing income and wealth distribution information.

The horizontal axis OH represents the cumulative percentage of the population (grouped by income from low to high), the vertical axis OM represents the cumulative percentage of income, and the arc OL is the Lorenz curve.

The curvature of the Lorenz curve is significant.On the one hand, it reflects the degree of inequality in income distribution.The greater the curvature, the more unequal the distribution of income; and vice versa.In particular, if all income is concentrated in the hands of one person and the rest of the population receives nothing, the distribution of income reaches complete inequality, and the Lorenz curve becomes a broken line OHL.On the other hand, if any population percentage is equal to its income percentage, so that the cumulative percentage of population is equal to the cumulative percentage of income, then the income distribution is completely equal, and the Lorenz curve becomes the 45-degree line OL passing through the origin.

Generally speaking, the income distribution of a country is neither completely unequal nor completely equal, but somewhere in between.The corresponding Lorentz curve is neither the broken line OHL nor the 45-degree line OL, but the arc line OL protruding to the horizontal axis, although the degree of prominence is different.

The part A between the Lorenz curve and the 45-degree line is called the "unequal area". When the income distribution reaches complete inequality, the Lorenz curve becomes the broken line OHL, and the area between OHL and the 45-degree line is A+B It's called the "perfectly unequal area".The ratio of the area of ​​inequality to the area of ​​complete inequality becomes the Gini coefficient, which is the standard for measuring the gap between the rich and the poor in a country.

基尼系数最小等于0，表示收入分配绝对平均；最大等于1，表示收入分配绝对不平均；实际的基尼系数介于0和1之间。如果个人所得税能使收入均等化，那么，基尼系数即会变小。联合国有关组织规定：若低于0.2表示收入高度平均；0.2～0.3表示比较平均；0.3～0.4表示相对合理；0.4～0.5表示收入差距较大；0.6以上表示收入差距悬殊。

So, what kind of "water level" is China's Gini coefficient at?China's Gini coefficient crossed the "warning level" in 1994, reaching 0.434, 1998 in 0.456, 1999 in 0.457, 2000 in 0.458, and 2001 in 0.459, at a rate of 0.1% per year. is incrementing.This cannot but arouse our high vigilance and attention.

According to a survey conducted by the Research Office of the Provincial Party Committee of Shanxi Province, a village in Xiaoyi City, Shanxi Province has 441 peasant households with a total population of 2024. 88% of the village, while the poorest 430 households have a total population of 81.2 and only have 89% of the village's total income, a difference of 395 times, and an average household income difference of 1.6 times.

Some people say that the high Gini coefficient in China is due to the poverty of the rural population in China, which leads to the low reference coordinates of the Gini coefficient.Although this statement is not unreasonable, but for the same indicator, different people may make completely different interpretations.The reality is quite different. It is precisely because of the poverty of China's rural population that my country's Gini coefficient should be low rather than high.

Some foreign practices may have some inspiration.In developed countries, there are strict restrictions on the deposits of the rich in banks, and heavy taxes will be imposed on exceeding a certain limit, so as to force their savings to be used for consumption and investment.Progressive income in taxation also forces the rich to pay more taxes.Also, an inheritance tax of up to 50% will make it impossible for the rich to leave most of his fortune to his descendants.Therefore, in developed countries, after the vast majority of rich people have a certain amount of wealth, they find that, except for their own personal and family consumption (for the vast majority of people who can be called rich, that but a small number), the rest of the wealth belongs to society, and they are but trustees of it.

Therefore, the developed countries' policies towards the rich force many rich people to become such people: on the one hand, he is an entrepreneur; on the other hand, he is also a philanthropist. Spend a lot of it, give a lot of it to the poor or good causes.Through such adjustment, a kind of social fairness is realized.

Engel Coefficient: Measure Your Affluence
In ancient my country, the salary of officials was also called salary, salary, salary, etc. In essence, salary is equivalent to our current salary.From the situation in ancient my country, grain and millet were the main form of salary for a long time, also known as Lumi, and even the official rank at that time was calculated by the amount of Lumi, such as the Sangong (the highest administrative official) in the Han Dynasty. ) Zhiwanshi, the head of the central department-Jiuqing Zhizhong Erqianshi.Stone is the calculation unit of Lumi, and each stone is Dendrobium (ten buckets), weighing 120 jins.The practice of using food as salary continued until the Qing Dynasty.

In ancient my country, salaries were mostly based on things, with some currency in between.For example, the official salary in the Tang Dynasty mainly consisted of three parts: granting land, granting salary, and salary.Granted land refers to the land that is uniformly distributed by the government according to the level of official rank in order to prevent price fluctuations and ultimately guarantee the interests of officials. Officials enjoy.Cilu is Lumi distributed annually, also known as Suilu.Salary material means that in addition to salary, the imperial court also provides food, kitchen materials, etc. (converted into money, which is called material money), and the two are collectively called salary material.

We can find an interesting phenomenon that the salaries of ancient officials are inseparable from food.Why is this?Because the level of economic development in ancient times was backward, having enough food has always been the pursuit and goal of people.Economists believe that with the development of the economy, people spend less and less on food, and more and more on clothing, cars, and entertainment. "Eating" is what people think of. The status has dropped.This seems to be a simple logic, but it is actually related to the Engel coefficient, an important indicator used as a reference when the government conducts macro-control.

Engel's coefficient is the ratio of total food expenditure to total personal consumption expenditure. In 1857, the world-renowned German statistician Engel clarified a law: With the increase of family and personal income, the proportion of income spent on food will gradually decrease. This law is called Engel’s law, reflecting this The coefficient of the law is called the Engel coefficient.Engel's coefficient refers to the proportion of total food expenditure in total personal consumption expenditure.Its formula is expressed as:
Engel's coefficient (%) = total food expenditure ÷ total household or personal consumption expenditure × 100%
According to Engel, the less a household earns, the greater the proportion of household income (or total expenditure) that is spent on food.As household income increases, the proportion of household income (or total expenditure) spent on food decreases.By extension, the poorer a country is, the greater the proportion of per capita income (or average expenditure) that is spent on food, and this proportion tends to decrease as the country gets richer.

Engel's law reveals the correlation between residents' income and food expenditure, and uses the ratio of food expenditure to total consumption expenditure to illustrate the impact of economic development and income increase on living consumption.The research on Engel's coefficient mainly has the following values:
(1) Used to determine the wealth of the family.

(2) Analyze the consumption situation of different consumers.

(3) Determine the level of economic development of a country and the level of prosperity of the people's lives.

As we all know, food is the first need for human survival, and it must occupy an important position in consumption expenditure when the income level is low.With the increase of income, when the food demand is basically satisfied, the focus of consumption will begin to shift to other aspects such as clothing and use.Therefore, the poorer a country or family lives, the larger the Engel coefficient; conversely, the richer the life, the smaller the Engel coefficient.

In the past, when Chinese met each other, they used to say hello: "Have you eaten?" But this greeting, which has been popular in China for thousands of years, was replaced by "Ni Hao" at some point.Confucius said: "Food and sex are also sex." Appetite is the most basic need of human beings, and it is human nature.Chinese people all know the old saying that "food is the most important thing for the people". For ordinary people, eating is the most important thing in the world.Therefore, we in China have formed a phenomenon that foreigners cannot understand. No matter where or when we meet, we always ask: "Have you eaten?" Even if you sometimes come out of the toilet or pigsty.

The "eating culture" that Chinese people are accustomed to has penetrated into every corner of social culture. Beating people is called "eating fists"; filing a lawsuit is called "eating lawsuits"; Known as "eating soft rice".It can be seen how important eating is in people's hearts!But why is "Have you eaten" gradually replaced by "Hello"?This is due to the reduction of the Engel coefficient.

Engel's coefficient is often used internationally to measure the living standards of people in a country and region.According to the standards proposed by the Food and Agriculture Organization of the United Nations, an Engel coefficient of more than 59% is poor, 50%-59% is food and clothing, 40%-50% is well-off, 30%-40% is rich, and less than 30% is the richest.

According to the 2002 "White Paper on China's Retail Industry" released by the China General Chamber of Commerce, by the end of 2001, the Engel's coefficient of urban residents' consumption dropped from 1997% in 46.4 to 37.9%.This is a major sign of improvement in the consumption structure of residents.It shows that the life of the people in our country, which is full of food and clothing, is changing to a well-off life marked by enjoyment and development.

With the improvement of living conditions, we now have a more obvious tendency to eat good food, eat refined food, pay attention to nutrition, and pursue convenience.In addition to eating, we need to improve living conditions, transportation and communication conditions, and greatly increase expenditures on culture and art, fitness and health care, and medical care to cultivate sentiments and improve physical and mental health.When we have more and more discretionary income in addition to eating and drinking, the Engel coefficient is decreasing, and our life is getting better and better!
Consumer Confidence Index: Starting from the Asian Market Morning

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