GDP explanation wrap-up
A final thought from the previous column, which explained the GDP calculation used to determine the performance of the economy, is necessary before moving on with our series.
The U.S. Department Of Commerce assembles the economic data required and computes the GDP number on a quarterly basis, and distributes it accordingly. Using this information, the Federal Reserve (America’s Central Bank) and the Treasury Department ensure an ample money supply to support the nation’s economy.
To do a comparative study from one quarter to the next, the percentage of change is computed between the two quarters, the current and the prior, to determine if there is a positive change indicating growth, or a negative change indicating a contraction in the economy.
By definition, two consecutive quarterly negative changes indicate that the economy is in a recession. In economics, a depression is a sustained, long-term downturn in economic activity in one or more economies (countries). It is much more severe than a recession. The Great Depression of the 1930‘s was triggered by America’s 1929 Stock Market crash, and it went world-wide, lasting in some countries into the early 1940’s.
The website www.useconomy.about.com/od/GDP-by-Year/a/US-GDP-History.htn contains a very informative presentation of America’s GDP from 1930 – 2013 of yearly values along with major events. Yearly values reflect the average value of the four quarters for that calendar year. Take a look if you have an interest.
Since we started this exercise, I have been asked by several readers what motivated me to tackle this, and what is my background. While this isn’t about me, I can see where a reader would like to know something about a writer’s qualifications and experience. To finish this column, I will share mine with you.
My under graduate work at USM focused in physics and mathematics which was followed by twelve years of technical work in the aerospace engineering efforts of NASA and surface effect ship research for the Navy. While serving on Picayune’s City Council in the 1970’s and early 1980’s, I studied political science at the graduate level at USM.
I am not an economist, but amassed enough credits in the subject from banking schools at Ole Miss and LSU, along with Tulane’s MBA program, to qualify as an advanced economic analyst with Mississippi’s Personnel Board.
After a banking career of fifteen years, I accepted an economic analyst position with the Mississippi Department Of Marine Resources. Over the last several years with the agency, I served as its Director of Administration. During this time I represented Mississippi in the Coastal States Organization, a lobbyist group in Washington of thirty-three coastal states vying for federal funding to support the ecological and fisheries efforts of the states.
This assignment entailed working closely with the offices of Senators Lott (who was Senate Majority leader) and Cochran (who was Chairman of the Senate Finance Committee). It taught me a lot about the workings of government in Washington.
With my research, I answered my questions about how America got into our current economic problems and felt I might help others with similar questions. I continue to ask you to take heed of 2 Chronicles 7:14.
By Aaron Russell, Sr.