Analyzing Spatial Income Distribution and Economic Growth
Spatial Distribution of Income
The spatial distribution of income illustrates how wealth is distributed among different geographical areas of a country, such as autonomous regions, provinces, and districts.
Economic Indicators
To understand the economic and social reality of a country, we must analyze the behavior of macroeconomic quantities and report the status of several variables, changes in general economic activity over a period of time, and the degree of development achieved. These indicators measure short-term aspects of the economy, growth in previous periods, and the overall level of societal welfare.
Short-Term Indicators
Short-term economic indicators are used to identify changes that a number of economic variables have experienced in a recent time period. They are used to interpret the economic reality at a specific point and make predictions about what might happen in the coming months. They can be grouped into:
- Indicators of economic activity: Industrial and agricultural production, housing, etc.
- Flow indicators: Registration of automobiles, cement and electricity consumption, etc.
- Labor market indicators: Persons affiliated with social security, population, registered unemployment, and so on.
- Wage and price indicators: Consumer Price Index (CPI), wage increases agreed upon in contracts, etc.
Measuring Economic Growth
To calculate the economic growth of a state during a given year, the real GDP of that year is compared with the previous year:
Economic Growth Rate = [(GDP - GDP1) / GDP1] x 100
To assess the actual level of growth of an economy, GDP per capita is used. The GDP per capita in Purchasing Power Parity (PPP) allows for the comparison of situations between countries, as it considers the different price levels in each one.
However, GDP does not include:
- Informal work taking place in the economy.
- The deterioration in the quality of life and the environment caused by uncontrolled production.
- The value of housework.
- Activities that do not pass through the market, such as those performed as gifts or for philanthropic reasons.