US Grand Prix was a race between team mates. It was McLaren vs McLaren and Ferrari vs Ferrari.
Alonso at one point was really pushing Hamilton but Hamilton held his cool and kept his position. Other than this the race was actually pretty boring. Nothing much happened other than lot of retirements.
After 7 races (out of 17) Hamilton leads Alonso by 10 points. It would be interesting to see how Alonso responds to the challenge.
At this point I don't think Raikonen or Massa will be able to make a bid for drivers championship.
Monday, June 18, 2007
Sunday, June 10, 2007
Canadian Grand Prix
Finally, Hamilton won his 1st grand prix in Montreal, Canada. It was an accident prone race with 4 safety car periods. It was interesting. I was disappointed by Raikonen's performance.
So, Hamilton now has a clear lead over Alonso and I believe this years driver championship battle will be between Hamilton and Alonso. I think Massa & Raikonen are too far behind.
In the constructor's it seems McLaren might win the season. As of now the McLaren and Ferrari are matched in terms of performance but McLaren has a commanding 28 points lead over Ferrari.
My predictions for this year: McLaren and Hamilton / Alonso. I haven't made up mind between Alonso and Hamilton but how cool will it be for a rookie to win the driver's championship. So I will be supporting him but it is going to be close.
So, Hamilton now has a clear lead over Alonso and I believe this years driver championship battle will be between Hamilton and Alonso. I think Massa & Raikonen are too far behind.
In the constructor's it seems McLaren might win the season. As of now the McLaren and Ferrari are matched in terms of performance but McLaren has a commanding 28 points lead over Ferrari.
My predictions for this year: McLaren and Hamilton / Alonso. I haven't made up mind between Alonso and Hamilton but how cool will it be for a rookie to win the driver's championship. So I will be supporting him but it is going to be close.
GDP Calculation Confusion
Now that we know how to calculate GDP there are some aspects which can be a little confusing. Let's examine them.
We calculate GDP using Consumption by households and Investments by businesses. Also, included in the Investment is the consumer purchases of household. However, when a household sets aside a part of its salary in savings account or in stocks it is not counted in the GDP measure.
Money used to acquire goods or services is counted in GDP. Transfer payments is not included in GDP calculation. This explains why social security and unemployment benefits are not included in GDP calculation.
Similarly household transfer payments like savings account or buying stocks are distinguished from Investments and are called Savings. These actions are not calculated in the GDP because they do not represent production but financial transactions.
However, in this measure we do not use consumption by businesses. Business also consume goods e.g. they buy office supply, some of them even buy juices, fruits or even lunch, etc for their employees. Why is this consumption not included in the GDP measure? I have no idea. Let me know if you have some.
We calculate GDP using Consumption by households and Investments by businesses. Also, included in the Investment is the consumer purchases of household. However, when a household sets aside a part of its salary in savings account or in stocks it is not counted in the GDP measure.
Money used to acquire goods or services is counted in GDP. Transfer payments is not included in GDP calculation. This explains why social security and unemployment benefits are not included in GDP calculation.
Similarly household transfer payments like savings account or buying stocks are distinguished from Investments and are called Savings. These actions are not calculated in the GDP because they do not represent production but financial transactions.
However, in this measure we do not use consumption by businesses. Business also consume goods e.g. they buy office supply, some of them even buy juices, fruits or even lunch, etc for their employees. Why is this consumption not included in the GDP measure? I have no idea. Let me know if you have some.
GDP Calculation
GDP is a method to measure the size of nation's economy. It is generally taken as a proxy for nation's well being. There are other measure's like Quality of Life etc which can claim to provide holistic view of nation's well being. However, the difficulty in measuring it makes this measure inviable.
GDP can be calculated using 2 approaches: income and expenditure. The expenditure approach is generally preferred. Using this approach the GDP is calculated as:
GDP = C + I + G + NX
where:
C --> Consumption by private households on consumer goods (durable and non-durable) and services (rent, medical etc).
I --> Investment by businesses. Investments are defined as spending now in order to increase output later. This also includes consumer's purchase of new housing.
G --> Government spending on goods and services. It includes salaries of government employee, defense expenditure and any investments by government
NX --> Net Exports measured as the difference of Imports (M) from Exports (X). Therefore, NX = X-M.
GDP can be calculated using 2 approaches: income and expenditure. The expenditure approach is generally preferred. Using this approach the GDP is calculated as:
GDP = C + I + G + NX
where:
C --> Consumption by private households on consumer goods (durable and non-durable) and services (rent, medical etc).
I --> Investment by businesses. Investments are defined as spending now in order to increase output later. This also includes consumer's purchase of new housing.
G --> Government spending on goods and services. It includes salaries of government employee, defense expenditure and any investments by government
NX --> Net Exports measured as the difference of Imports (M) from Exports (X). Therefore, NX = X-M.
Saturday, June 2, 2007
Marginal Benefit
While thinking about equity (equality) and efficiency of the markets I have some trouble understanding marginal benefit.
In the marginal benefit analysis we say that if I need something desperately I should expect to pay more for it. However, this does not take into account whether I can afford to pay more for it.
An example if you are thirsty and stranded in a desert what is worth more diamond for a nickel or water for 100 bucks. We would all pick water. This I can understand.
What I don't understand is if I don't have 100 bucks but only have 20. I still value water more. But I cannot afford it. How does marginal benefit take this into account?
Or consider 2 person equally thirsty, one has 100 bucks and another one has 20 bucks. They both value water equally. Only because the 1st one can afford to pay for it does not make it more valuable to him.
Therefore, I believe there are cases when market efficiency fails and we need government to step in to equally divide goods (or put price caps).
Let me know what you all think.
In the marginal benefit analysis we say that if I need something desperately I should expect to pay more for it. However, this does not take into account whether I can afford to pay more for it.
An example if you are thirsty and stranded in a desert what is worth more diamond for a nickel or water for 100 bucks. We would all pick water. This I can understand.
What I don't understand is if I don't have 100 bucks but only have 20. I still value water more. But I cannot afford it. How does marginal benefit take this into account?
Or consider 2 person equally thirsty, one has 100 bucks and another one has 20 bucks. They both value water equally. Only because the 1st one can afford to pay for it does not make it more valuable to him.
Therefore, I believe there are cases when market efficiency fails and we need government to step in to equally divide goods (or put price caps).
Let me know what you all think.
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