this post was submitted on 01 May 2025
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Today I Learned

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I swear I had Econ in college, but I don't remember anyone saying this so succinctly. It's from a weird place too, but this quote hits home. It's like population decline, but for money.

It was a truly baffling thing for an American president to say. And University of Michigan economist Justin Wolfers explained on MSNBC that things could get very bad as Trump’s scheme becomes reality. Wolfers ntoed that the idea of how much you can afford to buy with your income is called “real income.” And if real income falls, that’s called a recession. Wolfers went on to explain that if things decline as badly as Trump’s example, where someone who bought 30 dolls could only afford to buy two dolls, that’s called a depression.

Video from MSNBC: https://www.youtube.com/watch?v=sAZxLm6M_V0

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[–] Eatspancakes84@lemmy.world 5 points 2 days ago (2 children)

There is a variable called Gross National Income (GNI) corrected for inflation which is likely the variable Wolfers refers to. You can report it, but it will not be very different from GDP corrected for inflation which the media writes about all the time. Essentially production =income except for some small nuances.

[–] booly@sh.itjust.works 1 points 2 days ago (1 children)

GDI is supposed to be basically equivalent to GDP, so it's not a better number to use. Sometimes the numbers diverge (see here for a discussion of this issue in 2022) because they use different methodologies to determine the number, but that's usually a sign that some kind of measurement is off, not that there's some kind of actual divergence in the true numbers of what they purport to measure.

And we moved away from Gross National Product/Income to Gross Domestic Product/Income because it was a better look at the domestic economy. We care more about the production/income within national borders rather than the production/income of a particular nation's residents.

[–] Eatspancakes84@lemmy.world 1 points 2 days ago

GNI still gives a slightly better measure of income which is what OP was asking for. For instance if an American gets dividend income from a foreign company that’s part of GNI but not GDP, and vice versa if a US company pays dividends to a foreign shareholder. But yeah in practice all of this will be negligible.

[–] pelespirit@sh.itjust.works 2 points 2 days ago (1 children)

https://sh.itjust.works/post/37116488

Did you see my first crack at it? I would love your input. I think the "Real GDP" might be not adjusted for inflation? I can't tell.

[–] Eatspancakes84@lemmy.world 3 points 2 days ago (1 children)

Real GDP is adjusted for inflation. That’s what the term Real means. Nominal GDP is not adjusted. I always think that reporting should primarily focus on real GNI per capita, which is slightly more informative than real GDP, but in practice I think the differences won’t be shocking.

[–] pelespirit@sh.itjust.works 1 points 2 days ago (1 children)

Thanks for taking the time to respond. IMO, economics has some easy concepts that are hidden behind terms. Every industry has it, but all this info is kind of hidden anyway for a noob like me.

[–] frezik@midwest.social 1 points 2 days ago (1 children)

Is every 101 college class really just "here's what all the terms mean in this field"? I suspect the answer is yes.

[–] pelespirit@sh.itjust.works 1 points 2 days ago

Mine wasn't, it was a university known for being one of the best for economics and had huge classes. I did not do well in that class. It was an advanced 101 class.