New Zealand

New Zealand

by Jenner Gwinup

Fall 2006

New Zealand has made strides over the past two decades to become a more industrialized economy. In former years, the country was primarily an agriculturally based economy that relied on access to the British market. New Zealand has become a bigger player in the global economy. New Zealand now holds the 60^th highest GDP, while being the world’s 124^th most populated country with a population of less than 4.1 million. These figures present a high GDP per capita of $25,200 per person, the 37^th highest in the world. The gross domestic product is a figure that is used to show the economic well being of a nation and its growth over time. However, the GDP is a difficult figure to calculate. Researchers must find the value of all final goods and services that are produced in a country during a year. While millions of exchanges occur each year, statisticians must put together a puzzle of the monetary value that is generated from all transactions. (CIA)

The gross domestic product can be determined in three ways. The figure can be expressed as the market value of services and goods in their final form that are produced in a country during a period of time. Only goods and services that are produced within New Zealand’s borders are included in this figure. The expenditure method is another way of expressing the GDP. This calculation totals everything that was produced and will be purchased. Each final good or service is placed into a category .The individual categories are purchases by households, firms, governments, or the foreign sector. Each category is then further divided. Consumption is the total of consumer durables, consumer nondurables, and services. Business fixed investment, residential investment, and inventory investment represent the subcategories of the investment portion. Government purchases by federal, state, and local governments are included, with exception of transfer payments like social security benefits and welfare payments, in which no goods or services are received for the government actions. The foreign sector portion is calculated as net exports, which are exports minus imports. The expenditure method calculated GDP can be represented as the sum of consumption, government purchases, investment, and net exports. The third way of determining GDP is finding the value of income and labor. This method is based on the fact that when a good or service is sold, the revenue is distributed to the owners of the capital and the workers that produced the good or service. Labor totals about 2/3 of the GDP, and includes salaries, wages, and incomes of those that are self employed. The capital income makes up the remaining 1/3 of the GDP, including intangible capital, like patents, copyrights, and trademarks, and payments to the owners of physical capital, like the office buildings, machines, and factories that are used to produce goods and services. A percentage of both types of income is eventually deducted for taxes. (Frank and Bernanke)

The two most frequently used processes in generating gross domestic products that can be compared to those of other markets are the official exchange rate method and the purchasing power parity method. The former figure is determined by finding the value of all goods and services produced in a country in their final form over the course of a year. A monetary value in U.S. dollars is then assigned using an exchange rate of New Zealand dollars to U.S. dollars. This method is often criticized because of the inaccuracy of exchange rates. Economists fear that nations try to manipulate or fix the value of their currency and distort official exchange rates. Therefore, a nation’s currency may be over or undervalued, and not produce accurate figures when using an exchange rate. Economists favor market determined exchange rates, but even these exchange rates are usually determined by comparing the monetary value of a small group of services and goods that are traded between the two countries. This small set of services and goods does not accurately reflect the economy as whole, avoiding many of the items that a country produces. (CIA)

GDPs using the official exchange rate method are not accurate for comparing the GDP of country to itself over time, because they do not account for the depreciation or appreciation of items in a market from year to year. The change of appreciation will make the official exchange rate determined GDP fall or rise, even if the GDP in New Zealand dollars stays the same. Exchange rates are constantly changing and the official exchange rate applied to the conversion may not be the best exchange rate. The market could have crashed at the time the rate was determined; as a result, the exchange rate would not reflect normal monetary exchange values. The process of comparing two separate economies is a difficult and arduous task, and assigning the same monetary unit to all GDPs may produce inaccurate measurements. (CIA)

The exchange rate for 2005 was 1.4203 New Zealand dollars per U.S. dollar. The New Zealand dollar has been gaining ground on the U.S. dollar. The exchange rate in 2001 was 2.3788 New Zealand per American dollar. As New Zealand becomes more industrialized and more active in the world market, their currency becomes more competitive to foreign currencies. The 2005 estimate for OER GDP was $94.6 billion. This value is not used to compare with other countries; therefore, no rank is listed. (CIA)

The purchasing power parity method for determining GDP is a separate process. This process also gives the vale of all final goods and services produced in a country during the course of a year, but values the good and services at prices for the goods and services in the United States. For example, if an item cost three dollars in the United States, the total amount of that item sold in New Zealand would be multiplied by the cost in U.S. dollars, instead of multiplying the number of items sold by the price in New Zealand dollars and then multiplying that figure by the exchange rate. The purchasing power parity is favored by economists in regard to comparing standard of living and productivity of resources.

The PPP GDP is usually more difficult to compute. A U.S. dollar amount must be applied to each good and service produced in New Zealand. This process can be especially difficult when an item or service is not available in the United States or unused. Countries can place higher value on an item than Americans; therefore, not accurately depicting standard of living. In some cases, the purchasing power parity GDP is determined from a small set of goods, due to the fact of differences between the societies of the United States and other countries. More precise measurements can be made for more developed countries, like New Zealand. The purchasing power parity and official exchange rate estimate GDPs tend to be much closer together in the case of industrialized nations. The PPP GDP and OER GDP can be useful tools for estimating if a country’s currency is undervalued or overvalued. Since New Zealand’s OER GDP is smaller than the PPP GDP, then the official exchange rate used could be undervalued. (CIA)

The 2005 estimate for the PPP GDP was $101.8 billion dollars. The 2004 purchasing power parity GDP was estimated at $92.51 billion, while the 2003 figure was $85.26 billion. These estimations are better representations of New Zealand’s GDP, when comparing it to other industrialized nations and itself over time. New Zealand’s GDP grows each year, which is a good sign of progression and economic growth.

The leading industries of New Zealand are food processing, wood and paper products, textiles, machinery, transportation equipment, banking and insurance, tourism, mining, education, and scientific and industrial research. Food processing is very important to New Zealand’s economy. (Immigration New Zealand) Potatoes, barley, wheat, vegetables, fruits, beef, lamb, fish, and dairy products are some of New Zealand’s most popular agricultural products. Approximately ten percent of the country’s population holds jobs in the agriculture sector, with agriculture accounting for 4.3% of the GDP. New Zealand is very productive in its agriculture sector. With a land mass about the size of Colorado, New Zealand does not have a vast amount of area for agriculture. Less than seven percent of land is designated to permanent crops. (CIA)

(Ministry of Agriculture and Forestry New Zealand)

Trade is vital to the growth of the economy, and agricultural products are New Zealand’s leading export. Exports account for about 22% of New Zealand’s GDP. Australia is the leading trading partner, accepting 18.7 % of exports and providing 28.7% of imports. Australia and New Zealand lie in fairly close proximity to one another, so they can trade relatively easily, but are also in competition over the offering of goods in global markets. Australia’s major industries are mining, industrial and transportation equipment, food processing, chemicals, and steel production. Australia is richer in resources than New Zealand, due to its largest size. While both countries consume many of the goods they produce, Australia specializes in exporting are coal, gold, meat, wool, alumina, iron ore, wheat, machinery and transport equipment, while importing computers and office machines, telecommunication equipment and parts, machinery and transport equipment, and crude oil and petroleum products. New Zealand also exports machinery and agricultural products, so competition exists in these sectors. (CIA)

Much of New Zealand’s trade is conducted with two of the world’s largest industrial powers. Along with Australia, the United States and Japan account for a high percentage of New Zealand’s imports. The U.S. and Japan account for 11.1% and 10.3% of goods shipped in to New Zealand. The United States and Japan also accept many of New Zealand’s exports. The U.S. takes in 13.8% of exported goods, while Japan receives 10.3% of exports. The United States exports 9.2%, of the world’s agricultural products, 26.8% of industrial supplies, almost half of all capital goods, and 15% of all consumer goods, while Japan exports motor vehicles, semiconductors, transport equipment, electrical machinery, and chemicals. Many of the products that these two countries produce are New Zealand’s leading imports. New Zealand’s largest imports are of machinery and equipment, vehicles and aircraft, petroleum, electronics, textiles, and plastics. . New Zealand holds an unfavorable trade balance, with the 12^th highest trade deficit. New Zealand exports a valued $22.21 billion worth of goods and services, but it imports $24.57 billion worth.

A quarter of New Zealand’s 2.13 million workers are employed by the industry sector, which comprises 27.3% of the GDP. The largest employer is the services sector, which makes up about 65% of the population. The services sector contributes 68.4% of the GDP. Society as a whole has showed a shift to reliance on the services sector, as much of manufacturing is completed by machines, due to the advancement in technology. (CIA)

The banking industry is important to New Zealand’s economy. However, 85% of banking is completed by four Australian owned banks. An error in the GDP is the loss of revenue to other countries. Foreign companies contribute to New Zealand’s economy, but a lot of their profits are taken back to their home countries and invested. The GDP also does not count profits from New Zealand owned companies in foreign nations. These missing revenues could make a large impact on GDP.

In New Zealand, the percentage of women participating in the labor force continues to grow each year. According to the 1986 census, 41.7 % of the labor force was women. The 1996 census pointed out that 45.7% of New Zealand’s labor force was women. This trend shows that women are moving from unpaid labor, like childcare, to paying jobs. This information may be misleading, because women are leaving their homes to work and their children are being supervised by paid workers. (Statistics New Zealand) The GDP is being inflated, but the work of childcare that was once unpaid is now being paid for. The GDP does not take into account all the volunteer work and unpaid labor that occurs within in a country. Hundreds of volunteers donate thousands of hours each year to perform volunteer work in agriculture, environmental protection, and community services. (United Planet)

There has been conflict between the two ethnic groups of New Zealand. People of European descent total 69.8% of the population, while the Maori people account for 7.9% of New Zealand’s inhabitants. Maoris are the aboriginal people and feel they are losing rights. Some feel there is a “cultural and economic genocide” of the Maori. They feel that the New Zealand land is rightfully theirs and have called for an independent nation. Maoris feel that colonialism has robbed them of their culture. They believe their labor is devalued and they are discriminated against. (Maori Independence)

(SmartNet)

New Zealand showed a 2.2% real growth rate for its GDP, from 2004 to 2005, using the purchasing power parity. This figure is also adjusted for inflation. Their growth rate is ranked 161^st when compared to all other countries. This figure is one of the lowest growth rates in the world. The New Zealand government feels the economy should be reaching a 4% growth rate, as they are growing and becoming a larger player in world markets.

I think that the 2005 estimate purchasing power parity GDP of $101.8 billion dollars is a pretty fair estimation of New Zealand’s GDP. New Zealand is considered a developed country, and with a population in which 80% of its members live in cities, the amount of goods and services that are exchanged can be more accurately recorded. The GDP is most likely a little lower, because of the move of women into the workforce. However, the GDP does not account for unpaid labor, like volunteer work, so this combats the move from unpaid labor to paid labor. New Zealand and United States have similar societies, in terms of what is valued. Both countries are advanced in technology and development, producing a fair PPP estimate. New Zealand is a relatively small island nation and has done well in distinguishing itself as a prosperous nation that can contribute to global markets. GDP estimations due not rely heavily on extrapolation, like in comparison with GDPs of developing countries. Most goods and services that are available in New Zealand are also available in the United States, and vice versa.

Works Cited

“Background information.” Maori Independence. 10 Oct 2006
<http://aotearoa.wellington.net.nz/>.

 

The Challenge of Growth. SmartNet. 10 Oct 2006
<http://www.smartnet.co.nz/events/2003/round1.htm>.

 

Frank, Robert H., and Ben S. Bernanke. Principles of Macro-Economics. 3rd. Boston:
Mcgraw-Hill Irwin, 2006

 

“Primary Industries.” Agriculture and Forestry. Ministry of Agriculture and Forestry,
New Zealand. 07 Oct 2006 <www.maf.govt.nz/…/slideshow/sheep-flock.jpg>.

“Volunteer Abroad.” Long-Term Projects in New Zealand. United Planet. 08 Oct 2006 <http://www.volunteerabroad.com/listingsp3.cfm/listing/30522>.

 

Women’s labour force participation grows. Statistics New Zealand. 09 Oct 2006
<http://www.stats.govt.nz/analytical-reports/women-in-nz/womens-labour-force -
participation-grows.htm>.

 

“Work Opportunities.” Major New Zealand industries by region. 01 May 2005.
Immigration New Zealand. 06 Oct 2006 <http://www.immigration.govt.nz

/migrant/settlementpack/work/WorkOpportunities/MajorNZIndustries

ByRegion.htm>.

 

“The World Factbook.” New Zealand. 05 Oct 2006. Central Intelligence Agency. 7 Oct
2006 <https://www.cia.gov/cia/publications/factbook/geos/nz.html>.

 

Germany

The Gross Domestic Product of Germany[BCH1]

Beth Runciman

Macroeconomics, ECO 100, Dr. Bruce Hartman

German Economy

Germany is one of the most highly developed industrial nations in the world and, after the USA and Japan has the world’s third largest national economy (Organization for Economic Co-operation and Development (OECD), 2006). With an export volume of EUR 734 billion or one third of the gross domestic product (GDP) in 2004, Germany is the biggest exporter of goods worldwide (Straubhaar, 2006). In 2004, industry accounted for 84% of total exports (Straubhaar, 2006) and comprised 29.1% of GDP, with services making up 69.8% of GDP and agriculture 1.1% of GDP (World Bank, 2007). According to the CIA World Factbook (2007) Germany is among the world’s largest and most technologically advanced producers of iron, steel, coal, cement, chemicals, machinery, vehicles, machine tools, electronics, food and beverages, shipbuilding, and textiles. Germany’s main agriculture products are potatoes, wheat, barley, sugar beets, fruit, cabbages, cattle, pigs, and poultry.

Although the living standard in Germany is relatively high and the prices are reasonably stable, the economy is facing some structural problems with regard to the welfare systems and the labor market (Straubhaar, 2006). Germany’s high unemployment rate during the past decade was due to macroeconomic stagnation, the declining level of investment in plant and equipment, company restructuring, flat domestic consumption, structural rigidities in the labor market, lack of competition in the service sector, and high interest rates (Central Intelligence Agency (CIA), 2007). However according to the World Factbook (CIA, 2007), after a long period of stagnation with an average GDP growth rate of 0.7% between years 2001 to 2005, 2006 shows considerable improvement with 2.7% growth and a fall in unemployment to about 8%. In addition the country is grappling with the financial burden of reunification, which involves annual transfers from west to east of EUR 80 billion, or 4% of GDP (Straubhaar, 2006).

Sectors of Gross Domestic Product

Gross domestic product is comprised of agriculture, industry, and service sectors. Percentages of Germany’s GDP for each sector are similar between various sources. Most recently, for example, data from the Federal Statistical Office of Germany (2007) reveals 1.0%, 29.9%, and 69.1% of 2006 GDP for agriculture, industry, and services, respectively. The CIA Factbook (2007) gives 2006 estimates of 0.9%, 29.1%, and 70.0% to respective sectors. For the year 2004, the Federal Statistical Office of Germany (2007) indicates percentages of GDP for agriculture, industry, and services as 1.2%, 28.9%, and 69.9% respectively. Similar data from the World Bank Group (2007) gives 2004 values of 1.1%, 29.1%, and 69.8% to respective sectors.

Percentages of GDP from agriculture, industry, and services in Japan (the second biggest national economy) are strikingly similar, 1.0%, 31%, and 68% in 2003 (World Bank, 2007). However, other countries share this breakdown (1, 30, 69 give or take 2%) of relative percentages of sectors comprising GDP, such as Austria, Canada, Denmark, Finland, Italy, Netherlands, South Africa, and Sweden (CIA, 2007). The Federal Statistical Office of Germany (2007) breaks down industry and service sectors even further. For 2006, industry including energy represented 25.96% of GDP and construction represented 3.95% of GDP. In the 2006 service sector, trade and transport represented 18.3%, financial, renting and business activities were 28.95%, and other service activities were 21.9% of GDP.

Germany’s Major Industries

According to the World Bank (2007), the agriculture sector of GDP includes forestry, hunting, and fishing, as well as cultivation of crops and livestock production. The industry sector includes manufacturing, mining, construction, electricity, water, and gas. The service sector of GDP includes wholesale and retail trade (including hotels and restaurants), transport, and government, financial, professional, and personal services such as education, health care, and real estate services.

Information from the CIA World Factbook (2007) portrays similarities between industries and agricultural products of various countries. For example Germany, Japan, and Sweden all produce steel and vehicles. Denmark and Ireland share Germany’s industries of steel, chemicals, and shipbuilding. Germany and Japan additionally produce machine tools, electronics, and textiles. As far as agriculture, Germany and Japan both produce sugar beets, fruit, pork, and poultry. However, rice is Japan’s major form of agriculture. Germany and Czech Republic have very similar agricultural products including potatoes, wheat, barley, sugar beets, fruit, pigs, and poultry. The only difference is that Germany produces cabbages and cattle, whereas Czech Republic produces hops.

Straubhaar (2006) lists the most important branches of German industry. Thanks to its six renowned automobile manufacturers VW, Audi, BMW, DaimlerChrysler, Porshe, and Opel (General Motors), Germany takes its place alongside Japan and the USA as one of the top three auto manufacturers in the world. Car making is followed in importance by electrical engineering, mechanical engineering, as well as the chemical industry. Although industry continues to be the backbone of the German economy, the importance of industry is declining and it is increasingly being replaced by the service sector (Straubhaar, 2006). Information and communications technology is swiftly becoming a driving force of the service sector. Today, Germany is the biggest mobile phone and internet market in all of Europe (Straubhaar, 2006).

Determining GDP

A thorough search of the CIA, IMF, World Bank, OECD, and German Federal Statistical Office websites lead to a well referenced source of GDP methodology, the 1993 System of National Accounts (SNA 93), which I found linked on the UN site (United Nations, 1993). After attempting to grasp this fine and verbose piece of work, I felt similar to the cartoon in Figure 1. “Something is definitely happening. What? What? I just told you: something!” I found Frank and Bernanke (2007) to give a rather refreshing rundown on the intricacies of measuring GDP after reviewing the SNA 93.

According to Frank and Bernanke (2007) gross domestic product is defined as the market value of the final goods and services produced in a country during a given period. GDP is an aggregate of the market values of the many goods and services produced in a country. Economists determine the market value by adding up the “value added” by each firm in the production process. The value added by any firm equals the market value of its product or service minus the cost of inputs purchased from other firms.

The value of the final goods and services is determined by the value added method. Final goods and services are the end products of the production process consumed by the ultimate user, and are counted in the GDP. Intermediate goods and services, which are used up in the production of final goods and services, are not part of the GDP to avoid double counting. Only newly produced capital goods, such as factories and machines, are treated as final goods and are counted in GDP. Additionally, only goods and services produced within a nation’s borders within the current year are counted as part of the current year GDP (Frank and Bernanke, 2007).

Three approaches to determining GDP are via the production, expenditure, or income method (Frank and Bernanke, 2007). GDP can be expressed equally well as 1) the market value of production, 2) total expenditure (consumption, investment, government purchases, net exports), or 3) total income (labor income and capital income). According to the Federal Statistical Office Germany (2007), “the production approach means that the GDP is obtained by calculating the value added of all producers as the difference between the value of goods and services produced (output) and intermediate consumption, adding the taxes on products (such as tobacco, mineral oil and value added tax), and subtracting the subsidies on products”. In Germany, the GDP is calculated applying the production and expenditure approaches. The expenditure approach calculates “final consumption expenditure of households and government final consumption expenditure, capital formation and the balance of exports and imports (export surplus = exports minus imports)”. Calculating the GDP by means of the distribution, or income, approach is not possible in Germany because basic data on property and entrepreneurial income are lacking (Federal Statistical Office Germany (FSO), 2007).

The expenditure components of GDP can be broken down as follows. Household consumption includes food, clothes, haircuts, new cars, and the like. The type of expenditure for business firms is investment. For example, new factories and equipment, new houses, and increases in inventory stocks. Government purchases include but are not limited to new school buildings, new military hardware, salaries of soldiers and government officials. Foreign sector expenditure is represented as net exports, or exports minus imports and includes exported manufactured goods, and legal or financial services provided by domestic residents to foreigners (Frank and Bernanke, 2007).

Nominal GDP and real GDP are derived differently, as distinguished in definitions provided by Frank and Bernanke (2007). “Nominal GDP is a measure of GDP in which the quantities produced are valued at current-year prices: nominal GDP measures the current dollar value of production. Real GDP is a measure of GDP in which the quantities produced are valued at the prices in a base year rather than at current prices; real GDP measures the actual physical volume of production.” In other words, real GDP is GDP adjusted for inflation.

Chain weighting is a more complicated way of calculating real GDP. Annual data are linked with data from adjacent years using a geometric average (Frank and Bernanke, 2007). This new procedure makes real GDP data less sensitive to the particular base year chosen. Real output growth is measured more precisely than with the traditional method that uses a fixed set of prices. For example, in periods of substantial economic changes characterized by rapid relative price movements (continuous fall of computer prices or strong fluctuations of oil prices), estimates of real GDP growth can be significantly biased if they are based on a fixed set of weights that are years out of date (OECD, 2006).

Sources of Error

Political leaders and policy makers need economic data to help them in their decisions and planning. Thus knowing the limitations in estimations of GDP, the methods and approaches used are important. Some critics have complained that GDP does not accurately reflect factors such as the effect of economic growth on the environment or the rate of resource depletion (Frank and Bernanke, 2007). Increased pollution accompanied with economic growth certainly detracts from the quality of life. Although GDP is related to economic well-being, it is not the same. Many factors that contribute to well-being are not bought and sold in markets and thus are largely absent from GDP. The underground economy is also not measured in national accounts. Additionally, not all economically valuable goods are bought and sold in markets, such as homemaking tasks and volunteer services, and thus the GDP may be misrepresented. Using the value added approach for determining market value and not including intermediate goods will avoid further potential errors.

Various methods of arriving at the GDP have different applications. As a measure of a nation’s output, nominal GDP can be used to compare different countries in the same year, but not over time. There needs to be some method of excluding the effects of price changes when using GDP to compare economic activity at various points in time and to compare growth rates. Real GDP can be used for comparison, however OECD countries are moving to chain indices at different times, which impacts comparability over time and between countries.

Although GDP at official exchange rates is preferred by economists when gauging the economic power of an economy, market exchange rates are frequently established by a relatively small set of goods and services (the ones the country trades) and may not capture the value of the larger set of goods the country produces (CIA, 2007). Furthermore, exchange rates my suddenly go up or down by 10% or more because of market forces whereas real output has remained unchanged. As Germany’s market is relatively stable, potential error is not drastic. According to the CIA Factbook (2007), most economists prefer GDP at purchasing power parity when comparing living conditions or use of resources across countries. The difficulty with PPP is that a US dollar value has to be assigned to all goods and services in the country regardless of whether these goods and services have a direct equivalent in the United States, such as the value of an oxcart. For a wealthy industrialized country such as Germany, these concerns are minimal to the accuracy of GDP.

GDP of Germany

GDP statistics for Germany were found from various sources including the Federal Statistical Office Germany (FSO), the Organization for Economic Co-operation and Development (OECD), the World Bank (WB), the International Monetary Fund (IMF), and the Central Intelligence Agency (CIA) (Table 1.). Upon investigation I found that the OECD and the IMF use data from Germany’s FSO. I compared published 2004 and 2005 real GDP from the FSO and the IMF, and they matched indeed, 2207.20 Euro billion 2004 and 2307.20 Euro billion 2005. According to Germany’s Federal Statistical Office (2007), the GDP is calculated at current prices and price adjusted (deflation with previous year’s prices, changing every year, and chain linking). The rate of change of the price-adjusted GDP serves as a measure of economic growth.

The International Monetary Fund (2006) provides real GDP in four different ways. GDP in national currency (Euro) is calculated from constant prices or a fixed base year and also from current prices, chain weighted. Real GDP expressed in billions of U.S. dollars, current prices, chain weighted is based upon both GDP in national currency with exchange rate projections provided by country economists for the group as well as upon purchasing power parities (PPPs). For 2005, the constant price GDP was 2127.496 EUR billion versus the chain weighted GDP of 2241.000 EUR billion.

The World Bank (2007) uses nominal GDP to represent total gross domestic product. This is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the product. Data are in current U.S. dollars converted from domestic currencies using single year official exchange rates. For 2005, the World Bank reports Germany’s nominal GDP in billions as $2781.9, whereas the real GDP for 2005 reported by the IMF (2007) in billions was $2791.737. As real GDP accounts for inflation, it would be expected that nominal GDP would be greater than real GDP. In this case, the World Bank and the IMF are probably starting with differing numbers of production or expenditure.

The CIA World Factbook (2007) presents a nation’s GDP at purchasing power parity (PPP) exchange rates, which is the sum value of all goods and services produced in the country (Germany) valued at prices prevailing in the United States. According to the OECD Factbook (2006), PPPs are currency converters that equalize the purchasing power of the different companies. The data derived from the PPP method probably provides the best available starting point for comparisons of economic strength and well-being between countries (CIA, 2007).

It seems that the best source for the current estimate of the gross domestic product of Germany over the past few years would be Germany’s Federal Statistical Office. Real GDP is chain-linked and price adjusted to reduce potential error. In addition, the figures are revised for increased accuracy. The first quarterly GDP figure is released about 45 days after the end of the referenced quarter, and revised several times in order to include statistical information that has become available in the meantime. Also, large scale revisions are performed to introduce new concepts and definitions, to change over to a new price base or to include the results of new surveys or censuses or those conducted at irregular intervals (FSO, 2007). The final results are released after about four years.

Figure 1. Estimating GDP

 

 

Clement. (2001). Cartoon from the Financial Review. Retrieved April 1, 2007 from

http://www.ecoteacher.asn.au/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Central Intelligence Agency. (2007). The World Factbook. Retrieved March 16, 2007 from

https://www.cia.gov/cia/publications/factbook/

Federal Statistical Office Germany. (2007). Statistics from A to Z. Retrieved March 16, 2007

from http://www.destatis.de/presse/englisch/abisz/bip.htm

Frank, R. H., & Bernanke, B. S. (2007). Principles of Macroeconomics. New York, NY: The

McGraw-Hill Companies, Inc.

International Monetary Fund. (2006). World Economic Outlook Database. Retrieved March 16,

2007 from http://www.imf.org/external/pubs/ft/weo/2006/

Organization for Economic Co-operation and Development. (2006). OECD Factbook 2006.

Retrieved March 16, 2007 from http://www.oecd.org/

Straubhaar, T. (2006). Facts about Germany. Frankfurt am Main, Germany: Frankfurter

Societats-Druckerei GmbH

United Nations. (1993). Methodology – 1993 System of National Accounts. Retrieved March 19,

2007 from http://unstats.un.org/unsd/sna1993/

World Bank Group. (2007). Data and Statistics. Retrieved March 16, 2007 from

http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/

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