hi everybody welcome to this year one macroeconomics playlist macroeconomics is all about studying the performance of an economy how well is an economy doing well how on earth can we study that well we can simplify things by looking at some core macro economic indicators indicators that tell us how the economy is doing such as economic growth an indicator of incomes and living standards in the economy unemployment tells us about those people in the economy that don't have jobs inflation the rate of growth of prices in an economy trade looking at the value of imports of
goods and services compared to the value of exports of goods and services but also the distribution of income not just when their incomes are rising about how those incomes distributed across households in the economy but economists and politicians don't just look at these indicators there will be specific government macro economic objectives for each indicator and what we want to see is whether the objectives are being met so let's take economic growth the objective when it comes to economic growth is for growth to be strong sustained and sustainable remember growth is a measure of incomes and
living standards so we want that to be strong high that means high incomes high living standards we want it to be sustained continuous overtime and we want it to be sustainable that means the way in which we are growing today can continue overtime that means growth without excessive inflationary pressures that means growth without excessive environmental damage when it comes to unemployment we want unemployment to be low obviously we want employment to be high clear signs of a strongly performing economy here we call that full employment in economics inflation the rate of growth of prices in
the economy we want that to be low and stable clearly high inflation hyperinflation can ruin an economy but also deflation the prices are falling persistently that could also tear an economy to shreds so we say low and stable inflation is desirable in the UK we have a very precise inflation target of 2% there is some flexibility plus or minus 1% meaning that the range for inflation is between 1 and 3% but specifically the target is to and all economies around the world really will have a precise inflation target around that figure when it comes to
trade we are looking at balanced trade here that's our objective balance between the value of exports of goods and services and the value of imports of goods and services we're imbalance between exports and imports here trade deficits are deemed to be quite bad there can be negative consequences with trade deficits but even trade surpluses so a trade deficit is where the value of imports exceeds the value of exports but trade surpluses where the value of exports exceeds the value of imports can also have some negative consequences maybe not as bad as a trade deficit but
still can have some negative side effects to them which is why balance between exports and imports is the desired objective and when it comes to the distribution of income no economy out there will have a precise figure or anything with the distribution of income it's always going to be somebody's opinion therefore it's a normative consideration depending on the government in charge at the time and that's why the objective of a fair distribution of income clearly resonates the fact that it's an opinionated consideration here that's something very important to bear in mind you when it comes
to understanding the macro indicators and then getting the objectives just remember tigers the roar that tigers that's going to get you to the indicators and it's going to help you remember the objectives that come with those trade inflation growth employment the redistribution of income boom Tiger there's our five here but also remember the s S is for stability macroeconomics is all about achieving macroeconomic stability that is these four objectives all being met at the same time objectives with growth unemployment inflation and trade these are the four Big Daddies they're huge ones that we need and
if those four objectives are being met at the same time we're going to have a stable economy and that's what macroeconomics is all about here but as well as these core objectives in Redd economies all around the world will also have other very important macro objectives but maybe not in this core category we can call them non calm objectives the UK economy certainly is very much focused on these as in many other countries all around the world sound government finances making sure the economy can pay its way in the future environmental sustainability of course productivity
growth labor productivity growth productivity is just output per worker per hour making sure that productivity is rising as the years go on these are also very important objectives very important but maybe not in the core category that all economies around the world would really really focus on at all times but these are certainly there as well and worth remembering so that covers guys the key macroeconomic objectives what we study really for macro performance in an economy stay tuned for the next video what we're gonna look at the circular flow of income a way of modeling
the economy and we'll see some key macro conclusions from that thank you so much for watching I'll see you in that video [Music]
