Macroeconomic Principles and National Wealth Indicators

Macroeconomics and Aggregate Economic Perspectives

Macroeconomics is a portion of the economy that studies the problems of a country's economic priority from an aggregate or overall perspective.

Key Macroeconomic Problems

1. Growth: Economic growth creates jobs, improves the life of the population, and increases tax revenue, meaning the state is more likely to deliver better public services.
2. Employment: Unemployment is the main problem for a country, causing both a welfare loss and a waste of human capital.
3. Price Stability: If prices rise significantly (inflation), it produces imbalances, limiting the economy for individuals and social groups who suffer the consequences.
4. Budget Balance: When in the state accounts expenditures exceed revenues, it produces an imbalance in public finances (deficit).
5. External Balance: If a country buys from other countries (imports) more than what it sells (exports), there is an imbalance which must be funded with foreign debts.
6. Equity: A key concern of economic policy should be to favor a redistribution of income according to the values of justice and equity.
7. Sustainability: This ensures that current economic activities do not cause resentment or put future generations in danger.

Gross Domestic Product (GDP)

GDP is the market value of all final goods and services produced by a country during a given time period.

Components of GDP

• Consumption: Household spending on goods and services.
• Investment: Corporate spending on buildings, machinery, and facilities.
• Public Expenditure: State spending on goods and services across different public administrations.
• Exports: Goods produced in our country and sold to another country.
• Imports: Goods produced in another country and purchased by ours.

European Union Support Funds

• Cohesion Fund: EU support for financing projects in member countries whose income level is less than 90% of the EU average.
• Structural Funds: EU support for financing projects in the poorest regions of the EU territory. The most important of these is the European Regional Development Fund (ERDF), whose aim is the realization of projects for great infrastructures in disadvantaged areas.

Aspects Not Included in GDP

1. Domestic Work: If a husband and wife perform housework, these activities are not included in GDP.
2. Volunteer Work: The activities of nonprofit associations, which are not recorded for collection in GDP.
3. Barter Operations: Operations performed by barter cooperative associations.
4. Illegal Economy: Operations that are performed illegally.

National Wealth and Its Core Components

National Wealth is the set of goods, natural or manufactured, capable of meeting the current and future needs of residents in a determined country at a specific moment.

Core Components of National Wealth

• Consumer Goods: Food, clothing, and books.
• Property of Production: Factories, machinery, and means of transport.
• Human Capital: The working population of a country, together with its level of qualification.
• Natural Resources: Coasts, rivers, minerals, and forests.