(Article about economics of academia and “strategic practice” -from (current) last section of section free download at top.)
Any economic marker addressed in the course of Macroeconomic practice requires explanation to the laymen, -and many miss that when Fed Rates are changed, professional “Macroeconomists” offer “their best guess” as to which market-dominant, impacting factors are being responded to in the current Fed Rate cycle, to repeat:
Macroeconomics, the branch of economics concerned with assessing the facts of the international economy, knowing all the factors the Federal Reserve “pushes” through its network of macroeconomic equations before adjusting “Fed Fund rates”, does not -apparently- educate economists to a sufficient degree, -or “trends of learning” cloud clear sight of the economy. Example:
GDP (Gross Domestic Product), is taught to be a more accurate measure of how “robust” a nation’s economic positioning is in the world (The global economy is twenty-four hours a day, seven days a week, and all currency supply is generated by global central banking “consortiums”.), and the GNP (Gross National Product), is taught to be a less accurate indicator. One reason makes enough sense:
“The GNP is impacted by currency exchange rates, the GDP is not.”
-Looking at two factors used to calculate the GNP, “Exports” and “International Citizens”:
A citizen of the US starts a business in China, and he does exceedingly well, with a large customer base in the US and with this application of math, anything the “China-based US businessman” sells to a customer in his home country cannot be counted as an “import” -it isn’t a “foreign owned” business. GNP counts production of all international citizens, and though it is not common that a US businessman is allowed to become a citizen of China, even after he starts a business there, should he be allowed to, all production generated by his business will now be calculated as a part of China’s GNP.
Regardless of how hard it is to find wealthy US ex-patriots in China, the model is a global measure, and the practice of world economics includes in GNP calculations “hypothetical formularies” like “covert imports”: Internationally traded goods counted as domestic product available to potentially become exports “at any time”. Naturally there is no marker called covert import in the Global economy, but upon becoming citizens, every Mexican American has their production now counted as part of the US’ GNP. (It is no longer reporting to “Mexico’s global position as reflected in its GNP”.)
Addressing “trends in learning”, to say “GNP is impacted by exchange rates” is only stating half the issue, because as a quarter and annual macroeconomic indicator, taken with the volume of chaotic networking figures, valuations, and markets accounted at every moment globally, it is impossible to eliminate the possibility of GNP indicators having unique impacts on exchange rates.
Fractional reserve currency valuation involves International trading partners (US & China for example; it involves all international trade), keeping record of how much is exported and imported between two countries. As a (fading) global reserve currency, all US dollars held as reserve in China are not counted in the “balance of valuated worth” arrived at by taking all exports, subtracting all imports, and measuring the “trade deficit”. However, with too lop-sided a trade relationship shared between two countries for too long, the country (China) always recording a deficit in international balances, (US) come to remove the marker “reserve” from an amount of US currency, increasing US debt “too reflect protracted trade imbalances”; it is accepted practice founded in Reserve/Central banking math.
-The paradigm paints a scene:
People laboring for currency across the planet too tired, distracted, or concerned with personal matters to notice two six packs of beer cost 3 dollars and change in the seventies, and now,
“The twelve-pack’s the best deal. Let’s chip in Friday at work for a coworker’s party this weekend.” –They came up with the math “for us”, and people let their math dictate value.