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All episodes of Planet Money Summer School can be found here.
What exactly is the “economy”? Not long ago, “economy” itself was not a concept that people talked about very often.
What changed that was an effort to measure every economic thing the United States did or does and add it all up in an effort to create something called gross domestic product, or GDP.
Last week at Summer School, we heard about the tools that governments have to stabilize the economy. But to do that, you need to know what you are stabilizing. How do we know if the economy is doing well?
Our path out of economic darkness and into light has been guided in large part by a single statistic: GDP. With its help, assessments of the economy have gone from vague and anecdotal to relatively precise and consistent, almost overnight. GDP tells us how much the economy has grown or shrunk, governments use it when formulating economic policy, and investors use it to decide where to put their money. It’s the closest thing we have to a report card on how we’re doing in this big ecosystem called the economy.
This week: Origins, history and problems with economic indicators, including what’s been left out.
For more details on the new approach to incorporating inequality into GDP, Check out our latest newsletter.
We cover:
- gross domestic product
- national income
- Intermediate and finished products
- What’s left of GDP?
Task:
As you shop this week, think like an economist. Ask yourself if you’re buying goods or services. Think about all the intermediate goods that go into the final product. Did you consume more goods or services this week? What are the most common intermediate goods? Let us know using #PMSummerSchool.
Summer Economic Song: Each week, we pick some of our favorites and add them to Our PlaylistRecommend your favorites on social media. Be sure to use #PMSummerschool.
At Planet Money Summer School, mobile phones are allowed during class. View Tik Tok PM of the Week!
music: Flamingo, Surfing Surfing, Werner tangent lineand Don’t look down.
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