Synthesis Essay

Economy is a very special subject. You cannot test hypothesis by doing the experiment in the laboratory just like chemistry or physical. Also you cannot test a principle by do the research questionnaire survey like psychology. Economy is growing through the history. After Depression, economist will have questions like what caused the depression; how can government recover the economy after that? Economist gain the new hypothesis through the question they have. What happened if we increase the unemployment insurance? What was the consequent for a government’s policy? How can we increase the national GDP? What should we do to make everybody better off? However, how they solve the question? The answer is – data, the compass in the economy.

Economist don’t “create” definition. They use data to “summary” the definition. When they collected data about import and export, economist found there always a difference between exports and imports. When it is smaller than zero, country suffers from “deficit”. To be the opposite situation, when it is greater than zero, country undergoing “surplus”. Country faces different problem under those two difference situation. So to be more convince, economist summary those difference as the definition “Net export”. This cause a creation for a new definition—net capital outflow.

(More information about “net export” please click here:

http://notjustaccounting.blogspot.com/2016/04/open-blog-9-nsonx.html)

To understand deeper about “net export”, Economist tried to analysis problem in different way. For the previous one, they think the amount of purchasing goods as variation quantity, like how many goods that other country buy from domestic (export) or how many good that domestic buy from other country (import). They analysis the situation by using the loose of the domestic fund which is spent in purchasing the foreign assets. From the data they collected, they also found another special relationship between export and import – net capital output.

(More information about “net capital output” please click here:

http://notjustaccounting.blogspot.com/2016/04/open-blog-9-nsonx.html )

Those are not the only example. Economist also summary some other definition by analysis the data they collected. Because of the development of the economy, the price of the goods is variety through the different generation. After collected so many data, they want to figure out a method to compare the price in different year so that they found a new definition “CPI” can do the research more easily. Under this definition, economist found more diverse economist environment like “deflation” and “inflation”.

(More information about “inflation” please click here:

http://notjustaccounting.blogspot.com/2016/02/open-blog-3-inflation-and-cpi.html)

We use data to see an economy situation more clearly. First, as I post before in the prompt blog #6, people always think economist have different opinions. To figure out whether this is true or not, researcher did a survey to some economists. They asked economists’ opinion about some basic proposition, and collected the percentage of economists who agree. As the result, most percentage of economists agree the main principle about the economy.

(More information about this research please click here:

http://notjustaccounting.blogspot.com/p/normal-0-7.html)

       Also, Trump’s opinion about the unemployment rate is also a good example. Trump claimed that the unemployment rate which was published by the U.S. government is unbelievable and the real data alcutally should up to 20 to 40 percent. Should we believe it or not? We should compare with number that showed from the Bureau of Labor Statistics, a unit of the United States Department of Labor. With the help from the government, they collect date with more patient and the date they collected are more accurately. And from the picture which I showed on the prompt blog #4, we known that the data from the BLS is more professional than the Trump’s, so we should not believe Trump.

(More information about this please click here:

http://notjustaccounting.blogspot.com/p/two-sources-i-want-to-share-and.html)

       When we wonder about is GDP a useful measure, we use data to help us again. As a table I showed on the open blog #2, after we put the GDP and other three measures of the quality of life (life expectancy, average years of schooling and satisfied with water quality) for twelve major countries, it is easy to found that the country which has high GDP, has a higher life equality than the country which has lower GDP.

 

(More information about GDP:

http://notjustaccounting.blogspot.com/2016/02/open-blog-2-is-gdp-useful-measure.html)

Without data, economist cannot summary new definition. They would never know what is net export, net capital output or the relationship between this two definitions. They cannot see and analysis the situation more clearly and with intellect. They will confused by Trump’s opinion and even feel uncertain about themselves. In the end, they cannot make clearer decision to make everybody better off.