Lecture 2: Basic Macroeconomic Concepts

[@sitrakaforler8696]

Soooo to summarize : 00:18 Macroeconomic issues are currently volatile and complex. 02:35 Understanding aggregate output is crucial for macroeconomic analysis 07:02 Understanding GDP in a simple two-firm economy 09:33 GDP is the value of final goods and services produced in an economy during a period of time. 14:17 Income is derived from production, either going to workers or owners of capital. 16:29 Distinguishing between nominal and real GDP is crucial for understanding an economy. 20:36 Understanding nominal and real GDP and their relationship to prices and quantities. 22:46 Understanding the difference between nominal and real GDP is crucial for accurate economic analysis. 27:01 US employment measure through CPS (important for grads students) 28:57 Unemployment rate at record low levels due to stimulus and pent-up demand. 33:09 Inflation is a sustained rise in prices ! 35:09 Inflation problem exists despite selective price index usage. 39:03 China fears a similar economic slowdown to Japan's....and signs are worrying everybody.

[@mathiaslarsen691]

Thank you!

[@rsuarezatencio]

Thanks MIT for sharing all the lectures freely!

[@ClaudiaS193]

Thank you Professor & MIT for sharing the lecture. I’m very grateful for that. 🙏 ❤ With best wishes for all of you from Germany 🇩🇪

[@AlAmin-uc8py]

We are grateful to MIT board & USA🙏🙏

[@rollo69222]

I am teaching Macro next year as an assistant teacher and these lectures are a tremendous help especially since the curriculum is almost the same or atleast based on the same textbook :D

[@stefanospinelli7995]

Crazy material here! Thanks a lot MIT, love from Italy

[@iqranadeem7924]

Thanks professor, thanks MIT for this wonderful series of lectures.❤

[@pradeepbhatnagar4848]

Outstanding Presentation nd Informative too as a management professional in my opinion.Important topic too.Thanx for the contents.......! 👍👍

[@abdul_kobi]

God bless prof. Ricardo J. Caballero

[@dioricci]

Thank you! Awesome classes!

[@myelinboo7325]

I am learning this, love this from Thailand

[@user-se9uk2py5k]

Excellent

[@NRIAjay]

As professor walk a lot while delivering the lecture it would be great if we can have a far view angle of the video so our eye ball movement is not much while watching, higher the eye ball movement increases pain. writing my experience here. Loving the content and greateful to MIT.

[@marcwhite6267]

The amount of pain is immense; the suffering is ineffable.

[@funkymonk5344]

@@marcwhite6267😂😂😂👍👍👍

[@funkymonk5344]

Oh you’re the dude who said in another comment here that you doounderstand why young people are not interested in learning. Gosh, you’re really a boomer by all definitions. 😂

[@whatoh3407]

Sounds boring. I like his movement. I keeps my attention

[@Atlas2040]

The walking is fine. You should try to chill out.

[@이동환-u8s]

Thank you Thank you Thank you MIT!!!

[@SphereofTime]

19:32 Nominal vsReal GDP

[@talentedcrown1864]

What's the mechanism of deciding the base year, and how sure will the authorities be, to decide a particular year as a base year, and in how much time does the base year change.

[@jonesdavis8474]

Thank u sir and thank u mit❤

[@petecanniff3348]

The lack of returning workers I feel is because the pay was too low. The expense of going to work reduced the take home pay to a negligible amount that was easily accommodated, by small budget sacrifices.

[@ankhilluna3688]

thank you MIT

[@luisperalta-zv6ox]

Thanks MIT too

[@TheHiLiteShow7]

Thanks MIT the professor was very clear! What I’d love to know is what tools are available for an economy to fight against deflation? That seems a very hard position to be in

[@AlphaSena]

The most widely used tool by government of different countries in printing more money and cutting interest rates. Thus making people to spend more and more.

[@ankitchakraborty1126]

A real Gem... Day 1 (02-09-2024). From India

[@joshwilson9393]

For those students, or others who are watching this outside the university, what textbook and ed are they using? I'd like to find it to read from and follow along.

[@mitocw]

There is one primary text for the course: Blanchard, Oliver. Macroeconomics, 8th edition. Pearson, 2021. ISBN: 9781292351476. See MIT OpenCourseWare for more info and materials at: ocw.mit.edu/courses/14-02-principles-of-macroeconomics-spring-2023/ Best wishes on your studies!

[@mehdishiriz5101]

Very well conducted course. Please advise what text book the Professor is using and which can be used as a reference. Thank you.

[@mitocw]

Textbook: Blanchard, Oliver. Macroeconomics, 8th edition. Pearson, 2021. ISBN: 9781292351476. See the course on MIT OpenCourseWare for more info and materials at: ocw.mit.edu/courses/14-02-principles-of-macroeconomics-spring-2023/ Best wishes on your studies!

[@hamsternchips]

Professor, I'm curious about your choice to give definitions for the whole course in a single lexture. I wonder if the definitions were given in context of the concept being learned would help students retain the information better.

[@funkymonk5344]

As an economics professor myself, he depend give the definitions for the whole course in this lecture.

[@Lucky-dr9hi]

Is it the part of Principles of Macroeconomics II??

[@kwekuamoah]

how are you determining final goods, how do you know someone won't take that good and use it .

[@oddshaft4851]

that’s part of advanced theory, introductory economics really gives you the set of tools for you to apply them in an overly simplistic model, so it is easy to determine on this model but it has really advanced mechanisms and interactions for you to determine what really is a final good and what isnt

[@AyushMishra-qz9bv]

I am curious about the reference book used for this course, I am unable to get any information on the website.

[@mitocw]

ocw.mit.edu/courses/14-02-principles-of-macroeconomics-spring-2023/pages/topics-and-readings/ Best wishes on your studies!

[@GiovaniCeotto]

Regarding real vs nominal GDP, or even inflation calculation, how can we fix the price of things such as cars, for example, if the quality of the cars are increasing? Let's say smartphones were part of the list of products used to measure inflation. Their price go up over time, but one could argue that the valeu they deliver also went up. Of course smartphones are just an example. Even basic goods such as food are constantly improving in real value. I wonder how they account for this.

[@LamontGranquist]

That is a "Hedonic Quality Adjustment" and is somewhat controversial. If you need a vehicle, and you cannot buy one without a backup camera due to laws requiring them in new vehicles, then you're being forced to pay for that even though you might not require it (you may live rurally and not have kids or pets and may not even reverse out of your driveway). Similarly, if you just need a smartphone, you probably cannot buy or use a smartphone from 10 years ago. The fact that the cheapest smartphone today may be better than the cheapest smartphone from 10 years ago may not be worth that much to you when you just need it for some app that you're more or less required to use to participate in society.

[@mtriggers]

Thank you, I am as thick as shit, if only I had Forest Gump's mum to get me a decent education when I was younger . Never had the opportunity to go to uni, hanging radiators at 15. This stuff is gold and I'm 50 🔝👍🏻 so anyone in there 20s should be jumping all over this!

[@duncanadugyamera2349]

I'm in my 20s, and I feel so lucky to be here

[@kh72736]

Is it safe to say gdp can be the value of a good able to be resold? Car company buys $100 steel for the sole purpose of selling a $200 car.

[@Anurag_sharma_2_3]

It is still same as value added method

[@nateturesdomain2599]

Does anyone know if there is a file for the professor's slides used in his presentation? I've downloaded the course, but I can't find them however much of the data is unreadable for me at the moment. Would be most helpful to not have to screenshot them all. Thank you.

[@mitocw]

Sorry, the slides are not available for this course.

[@MohitK08]

At 24:54 , Shouldn't it be two consecutive quarters of negative GDP growth?

[@dot-m4u]

Pretty sad as a Japanese that my homeland is mentioned multiple times as an example of sluggish economy 😅

[@NRIAjay]

When the next lecture is coming out?

[@mitocw]

kzbin.info/www/bejne/nKnVqIegZ86SiZY&ab_channel=MITOpenCourseWare

[@emirhandemir3872]

I fcking swear I didn't know these things were things you could learn and invest accordingly! I always thought that these things were something that smart people do and exploit. Fck! Ignorance is the biggest evil one can do to himself! I wish I knew that I could learn these priceless information before!

[@normalpsychology]

This professor says that services amount to about 33% of GDP. Many other sources seem to say that good amount for 30% of the GP. So, who is correct?

[@mowthpeece1]

Based on your wording, both could be correct.

[@parrampampam]

You've misheard him. At 6:50 "on average ... 2/3 of the consumption is in services, not goods". So it's 2/3 not 33%

[@user-io1ug3tp3w]

The reason of the unemployment rate still high is people who do E commerce Since COVID is still growing

[@ashok755]

Not a boring lecture at all.

[@pablocarbonarogolan4364]

The definition of GDP like "final goods" is wrong

[@ShyamKatha-f7r]

♥️🇳🇵

[@pankajarora5692]

How are you doing

[@normalpsychology]

"To be more precise, according to data provided by the World Bank, today around 78% of the US GDP is explained by services."

[@alexandreoliveira-xy8ie]

Whoever filmed this class never took an online course, right? stop this camera 😂😂

[@johnd.5601]

What stops someone from entering all these lessons into a AI model and creating a trading bot? Any country can do this. Any country could create wealth by doing it.

[@fuji_films]

Lmao, you really think this helps anyhow with trading? My dawg, financial markets are WAY more complicated, and I am telling you that very few people know how a market will evolve. For something like 99.9% of the investors, it's pure sorcery. In the short terms markets move with no logic, when no important events happen. Trading bots have no use.

[@oddshaft4851]

developing a trade bot would require developing like 30 more factors for an AI to deal with, which today these AI’s can at least deal with 5 to 6 factors if that’s what I remember, and considering that took decades to develop, it is impossible today. financial markets are crazy complicated

[@SamuelVegaBermudez]

La economía son un montón de viejos mañosos.

[@贺然-v5m]

在中国上学不如来youtube上学

[@Paul-hy8pc]

The professor’s accent is driving me nuts. I’m sure he is brilliant, but he should work on losing the accent as much as possible before he starts teaching classes.

[@mowthpeece1]

He's perfectly clear. Learn to stretch, your xenophobia is showing.

[@normalpsychology]

This professor says that services amount to about 33% of GDP. Many other sources seem to say that good amount for 30% of the GP. So, who is correct?