Understand economics from scratch

Chapter 36 How to Gain Insight into the General Economic Trend from Financial News—Economics You Need to Learn to Understand Financial News (2)
In the early session of the Asian market on July 2009, 7, the U.S. dollar index temporarily stabilized above the 1 mark after a rebound in late trading overnight.As the latest economic data released by the United States on the previous trading day failed to further support the market's optimism, especially the decline in the consumer confidence index in June, consumers' views on the current economic and employment situation and future economic and employment prospects are still very low. Pessimistic. Affected by this, the dollar was once again lifted by investors' safe-haven buying and then rose, but the gains were limited.

世界大企业联合会在2009年6月30日发布的报告显示，6月份消费者信心指数回落，尤其是对未来6个月经济活动的预期指数出现下降。数据显示6月份消费者信心指数降至49.3，该数据远低于此前接受调查的经济学家所预计的56.0，5月份修正后的指数为54.8。6月份现状指数由5月份的29.7降至24.8，初值为28.9；6月份消费者对未来6个月经济活动的预期指数降至65.5，5月份为71.5，初值为72.3。同时，消费者对目前就业形势以及未来就业前景的看法也变得更为悲观。受此影响，投资者对美元的避险需求再度被激发，美指也在该时段迅速攀升至80.00位置上方。

What is the Consumer Confidence Index?Why is the currency exchange rate of the Asian market linked to the consumer index?
In the 20s, the Survey and Research Center of the University of Michigan in the United States first compiled a consumer confidence index in order to study the impact of consumer demand on the economic cycle, and then some European countries also began to establish and compile consumer confidence indexes. In December 40, the Business Climate Monitoring Center of the National Bureau of Statistics of China began to compile the Chinese Consumer Confidence Index.As the capital of the whole country, Beijing took the lead in establishing a consumer confidence index survey system at the provincial and municipal levels at the beginning of 1997 on the basis of extensively learning from domestic and foreign experience.

The Consumer Confidence Index is an indicator that reflects the strength of consumer confidence. It comprehensively reflects and quantifies consumers' subjective feelings on the evaluation of the current economic situation and on economic prospects, income levels, income expectations, and consumer psychology, and predicts economic trends and consumption trends. a leading indicator of .

Consumer confidence index is composed of consumer satisfaction index and consumer expectation index.The consumer satisfaction index refers to the consumer's evaluation of the current economic life, and the consumer expectation index refers to the consumer's expectation of changes in the future economic life.Consumer satisfaction index and consumer expectation index are composed of some secondary indicators: satisfaction with income, quality of life, macro economy, consumption expenditure, employment status, purchase of durable consumer goods and savings, and expectations for the next 1 year and future 2 Expectations for home purchases and improvements, car purchases, and stock market changes in the next 6 months.

According to economic theory, consumption is a function of income.In the final analysis, consumer confidence (or sentiment) is the reflection of consumers' evaluation and expectation of their family income level. This evaluation and expectation is based on consumers' subjective understanding of various factors that restrict family income level.These factors mainly include: the economic development situation of the country or region, unemployment rate, price level, interest rate, etc.Changes in these factors in a certain period of time will inevitably lead to changes in consumer confidence (or sentiment), and changes in consumer confidence (or sentiment) will lead to changes in their consumption decisions, thereby affecting the process of economic development.The Consumer Confidence Index is a measure of the change in consumers' consumption psychology. It is an index that reflects the degree of change in consumer confidence calculated by collecting data through household surveys and using certain statistical methods.

At present, the common method used in the survey of consumer confidence (or sentiment) in the world is the questionnaire survey method.The design of the questionnaire closely revolves around the following contents: economic development situation, household income and employment, price level, consumption or purchase intention.Each aspect consists of two types of questions: perceptions of the current situation and expectations for the future.The former refers to consumers' evaluation of the current overall situation of the above-mentioned basic aspects; the latter refers to consumers' estimation or expectation of the development and change trends of several basic aspects in the future period (such as half a year or one year).For example, the US Consumer Confidence Index released by the Conference Board of the United States has only included five questions since 1, namely: the current economic situation; evaluation of the employment situation; the economic situation in the next six months; the employment situation; the family Estimates of Gross Income.

Each question in the questionnaire generally has three answers: affirmative (positive), negative (negative) and neutral (unchanged), consumers choose one of them according to their own views or judgments.Indexes are usually derived using the weighted average method and the results are expressed in percentage points.Depending on the specific calculation method, there are two values ​​of the index: one is between 0 and 200. 100 is the median, indicating that consumer confidence (or sentiment) is neutral. 0 indicates extreme pessimism, 200 reflects extreme optimism.Second, the value is between 0 and 100. 50 is the median and 100 reflects extreme optimism.The US consumer confidence index released by the US Conference Board mentioned earlier belongs to the first form of value.

According to the survey results, the status evaluation index and expectation index, as well as the comprehensive consumer confidence index can be calculated respectively.The base period of the index can be selected as 100 (or 50) at the beginning of the calculation, or the consumer confidence index in a specific period can be used as the base period value.For example, the U.S. Consumer Confidence Index released by the Conference Board of the United States has been released since 1967, and the base period is set at the beginning of 1967 as 100, which is released every two months.Since June 2, it has been changed to once a month.From 1977 onwards, the monthly average in 6 is used as the base period of the index.

Cost of living index: choose the city that suits you

On the Internet, someone calculated a cost of living account for people living in Guangzhou, Shanghai, and Beijing:

The following costs are calculated based on the standard of a single male who has no girlfriend, does not suffer from minor illnesses, avoids gatherings with friends, rarely eats fruit, and never breaks pots and pans... (unit: yuan/month).

Guangzhou: Rent, water, electricity, coal, and broadband are 1100 yuan (general rent is 800 yuan, if one person lives in one room and one living room, most of them are more than 1000 yuan). Meals are 600 yuan. Generally, I don’t eat big meals. I occasionally go to AA with my colleagues on weekends Enjoy it, less than 50 yuan for one trip; 150 yuan for mobile phones and transportation expenses (usually there is a shuttle bus to work); about 300-400 yuan for daily necessities.At present, the average monthly cost is about 1900 yuan.

上海：房租及水电煤700～900元（合租两室户）；交通费100～200元（有班车的可免，不含的士）；通讯费100元（因人而异，但50元是底线）；餐费600元（未考虑公司有免费工作餐及请客吃饭）；其他还有人情往来、充电、娱乐等。总的来说，在上海每月消费1600元左右应该是一个参考指标。

北京：房租及水电煤800～1000元（合租两室户）；交通费200元（有班车的可免，不含的士）；通信费100～200元（各人不同，200元比较平均）；餐费450元（未算公司有免费工作餐及请客）。大致上，在北京每月起码消费2000元左右。

If you think taking the subway to work in Beijing or New York is too expensive, look no further than Tokyo.It costs $3.25 to ride the subway in Tokyo, and $11.7 will quickly disappear from your pocket if you drop by for a newspaper and a cup of coffee.The same thing is 24% more expensive in Tokyo than in New York.

With the development of globalization, "urban life quality" has become a matter of great concern to many residents in today's "global village".According to the website of "Forbes" magazine, the survey report "Global Cost of Living 2009" released by the famous American consulting firm Mercer shows that Tokyo, the capital of Japan, surpassed last year's "champion" Moscow to become the city with the highest cost of living in the world.The city with the lowest cost of living is Johannesburg, South Africa.The ranking of China's capital Beijing has risen by 2008 places compared with 11, making it the ninth most expensive city in the world.Four of the top 9 cities are in China.

In this so-called most comprehensive survey in the world, the investigators selected 6 cities on 143 continents as the survey object, and compared the spending of more than 200 items in each region, including housing, transportation, food, clothing , household goods, entertainment consumption, etc.In the comparison process, the investigators used New York as the criterion, with an index of 100. The indexes of other cities were compared with New York, and the index of consumption level higher than New York exceeded 100. The index of No.1 Tokyo is 143.7, and the index of the last Johannesburg is 49.6. The former is almost three times that of the latter.

In this ranking list, the performance of Asian cities is the most eye-catching.

Osaka has risen from 2008th place in 11 to second place as the yen has strengthened considerably against the dollar.Hong Kong, China ranked 2th, and Singapore rose 5 places to 3th.Karachi remains the cheapest city in the region, ranking 10th, up one place from 140.

Cathy Loose, Head of Information Product Solutions, Mercer Global Mobility Asia Pacific, commented: “Markets with strong currencies, such as China and Japan, have risen in the rankings and become more expensive for employees stationed abroad. However, some currencies, including the South Korean won, Indian rupee, Indonesian rupiah and Philippine peso, depreciated against the U.S. dollar, causing cities in these countries to drop in the rankings.”

因此，亚洲一些城市在榜单的排名下降。韩国从第5位下降到第51位，雅加达从第82位滑到第106位，而马尼拉则从第110位降到第126位。由于印度卢比对美元汇率的削弱，导致印度的城市排名纷纷下降。新德里从第55位跌至第65位，而孟买则从第48位跌至第66位。

Chinese cities experienced the opposite effect as the renminbi strengthened against most other currencies.Beijing is currently ranked 9th, having climbed 11 places to become the top 10 most expensive cities in the world.Shanghai, Shenzhen and Guangzhou are closely behind, ranking 12th, 22nd and 23rd respectively.

Zhang Shidong, Business Director of Mercer Greater China Information Consulting Services, believes: "The rise in the ranking of Chinese cities is mainly due to relatively good overall economic performance and relatively strong currency value, while the actual cost of living denominated in RMB has not changed much. Due to China's huge market Due to the scale and relatively optimistic market outlook, it is not expected that the expatriate dispatch plans of multinational companies will have a significant impact due to the relative changes in the cost of living."

Burden Factor: How to Relieve the Burden of Young People

Chinese tradition has always attached great importance to family affection. Mencius said: "Look up enough to serve your parents, and bow down to support your wife." That is to say, a family must include at least two generations of parents and children.If the economy is rich, the life expectancy is long, and other conditions are added, parents and grandparents can have parents and grandparents, sons and grandchildren, and four generations live together. Such a family is called "Yimen".

Since the reform and opening up, my country's population and family structure tends to be smaller, and this trend is still continuing.According to statistics, the average family population in my country was 1953 in 4.33, and it was generally stable between 20 and 50 from the 70s to the 4.23s. From the late 4.43s to the early 80s, with the implementation of family planning and changes in family awareness, the number of only children increased, the average family size gradually decreased, and the family composition showed a trend of miniaturization. The average population per family was 90 in 1982 and 4.4 in 2005, and the average family population decreased by 3.13 in 23 years.The number of only-children has exceeded 1.27 million, accounting for about 1% of the total population, and the one-child family consisting of only-child plus parents has become the most basic family model in cities.

As the only children born in the 20s, they are now in their "thirties". While they are taking on social responsibilities, the society is especially aware of the heavy burdens on their shoulders.For the vast majority of "post-80s" young families, it is indeed a heavy burden to support at least four elderly people and their own children.And such a burden can be measured by an economics term, that is, the burden coefficient.

The burden coefficient is also called the dependency coefficient and the dependency ratio, which refers to the ratio of the non-working-age population to the working-age population in the population, expressed as a percentage.It shows how much non-working-age population is borne by every 100 working-age population from the perspective of the whole society.The burden coefficient can be divided into the total burden coefficient, the children's burden coefficient and the elderly burden coefficient. Some people aged 14 and below and those aged 65 and above may also participate in the labor force, and among the working-age population aged 15 to 64, there may be some people who have not actually participated in the labor force.The above indicators are only calculated according to the age division, and do not necessarily reflect the actual ratio of support and being supported. Therefore, the burden coefficient is also called the age burden coefficient to distinguish the economic burden coefficient.The term "burden factor" generally refers to the age burden factor.Its calculation formula is as follows:

总负担系数=（小于14岁人口数+65岁以上人口数）÷15～65岁人口数×100%
The total burden coefficient is the sum of the child burden coefficient and the elderly burden coefficient.The nature of the burden reflected by the children's burden coefficient and the elderly's burden coefficient is different.Generally speaking, children and adolescents have not yet become the population of working age, and society and families must pay a certain amount for their growth.If they die halfway, the society's contribution to them cannot be recovered.The burden of old age is different. Except for a few people, they have made certain contributions to society, and the part they enjoy is actually a deduction from their past labor.Therefore, if the children's burden coefficient and the elderly's burden coefficient are calculated separately, it can reflect some impacts of changes in population age structure on social and economic development.

The world average burden factor was 1980 in 71.2 and 1999 in 60.0.my country's burden coefficient was 1980 in 67.4, 1990 in 57.6, and 1999 in 47.9, showing a downward trend, but this decline is the inevitable result of family planning.Because the population growth of children under the age of 14 has been greatly restricted.However, this trend is already reversing as the population ages.

The Research Report on Forecasting the Development Trend of Population Aging in China points out that China in the 21st century will be an irreversible aging society.By 2050, my country's elderly population will reach a peak of 4.37 million.At the same time, the United Nations predicts that in the first half of the 21st century, my country has always been the country with the largest elderly population in the world, accounting for one-fifth of the world's total elderly population; big country.

自1982年第三次人口普查到2004年的22年间，中国老年人口平均每年增加302万，年平均增长速度为2.85%，高于1.17%的总人口增长速度。2004年年底，中国60岁及以上老年人口达到1.43亿，占总人口的10.97%。

Everyone will be old one day, but in the near future, a couple will have to support four elderly people, and there will be nearly 4 million elderly people in the whole society. How will we face it?The basic solution is to establish and improve the basic endowment insurance system covering urban and rural areas, and further improve the social security system.Only by paying attention to the construction of the social security system including pension insurance can we effectively reduce the burden of the "post-4s" and even "post-80s" and promote the steady development of society.

Gross National Product: the value that really belongs to you

In 1929, an unprecedented worldwide economic crisis broke out, which devastated the world economy as if an atomic bomb had been dropped.But the strange thing is that when the crisis broke out, people didn't know it.At the time, US President Hoover even believed that the economic situation was improving.

We have no reason to laugh at the ignorance of the people at that time, because at that time, except for the incomplete national economic balance sheet of the Soviet statistical agency, there was almost no statistics on the national economy, so of course people did not know how bad the economic situation had become.

This devastating economic crisis has finally aroused people's desire to understand the state of the national economy.Therefore, the U.S. Senate Finance and Economics Committee commissioned Simon Kuznets to establish a series of indicators for statistical calculation of a country's input and output, and thus developed the "national income account".This is the prototype of the gross national product. In 1933, when the national income statistics from 1929 to 1932 were made public, people realized how terrible the economic crisis was.

(End of this chapter)