BiEM Week 1 lecture notes
Lecture 1: Context
The world bank classes absolute poverty as living on less than $1.90 a day
According to the world bank: In 200 years the number of people living in absolute poverty has fallen
from 90% to about 10% which is largely due to the growth of emerging markets
According to the world bank who only started recording data in 1980 it was calculated that 44% of
the population were living in absolute poverty compared to 10% today
Lecture 2: Exploring GDP
GDP is calculated the same way in every country therefore we can compare it across countries, it’s a
global measurement
GDP (Gross Domestic Product) allows us to see how fast an economy is growing
If you add up all the spending in the economy it will be the same as GDP output because when we
spend money on a good or service we hand over money to the producer and that money becomes
the producers income so in order to increase our national income we need to both produce more
and spend more.
There’s two ways to look at GDP
1. The spending side (demand)
2. The producing side (production)
The components of GDP can be broken down in terms of policy and stimulating demand when
looking at these two factors
Spending:
= C + I + G + (x-m)
C = Consumption
I = Investment (business spending, purchasing equipment for their business)
G = Government spending (schools, the NHS, infrastructure spending)
The three above is the domestic economy
X = Exports (foreign spending on UK goods)
I = Importing (UK spending on foreign goods)
But we also participate in trade overseas which are why the above
40% of all spending in China comes from investment, businesses investing in machinery and
manufacturing equipment
Lecture 1: Context
The world bank classes absolute poverty as living on less than $1.90 a day
According to the world bank: In 200 years the number of people living in absolute poverty has fallen
from 90% to about 10% which is largely due to the growth of emerging markets
According to the world bank who only started recording data in 1980 it was calculated that 44% of
the population were living in absolute poverty compared to 10% today
Lecture 2: Exploring GDP
GDP is calculated the same way in every country therefore we can compare it across countries, it’s a
global measurement
GDP (Gross Domestic Product) allows us to see how fast an economy is growing
If you add up all the spending in the economy it will be the same as GDP output because when we
spend money on a good or service we hand over money to the producer and that money becomes
the producers income so in order to increase our national income we need to both produce more
and spend more.
There’s two ways to look at GDP
1. The spending side (demand)
2. The producing side (production)
The components of GDP can be broken down in terms of policy and stimulating demand when
looking at these two factors
Spending:
= C + I + G + (x-m)
C = Consumption
I = Investment (business spending, purchasing equipment for their business)
G = Government spending (schools, the NHS, infrastructure spending)
The three above is the domestic economy
X = Exports (foreign spending on UK goods)
I = Importing (UK spending on foreign goods)
But we also participate in trade overseas which are why the above
40% of all spending in China comes from investment, businesses investing in machinery and
manufacturing equipment
