Economics Article For CFA Level I Candidates

[Arif Irfanullah]

http://www.economist.com/node/21555901

Once you’ve been through CFA Level 1 Economics, articles such as this one will make a lot more sense. Pay careful attention to terms like ‘Output Gap’ and ‘Potential GDP’. Notice that the article talks about three main ingredients of growth: capital, labor and innovation. (The Curriculum mentions technology which is effectively the same as innovation). If you quickly breeze through the Curriculum you might get a sense that Potential GDP is simple concept. I.e. it is the GDP at full output. From an exam perspective that is what you need to know. However, the article correctly points out the ‘Potential GDP’ is a slippery concept. Read the article to learn more…

 

[ElectroAnalyst]

Funny thing is I remember reading that article when it first came out about a month ago, but since going through the Economics curriculum in June, I do look at that article in a whole new light. Very cool, thanks for pointing it out!