Reading a GDP Chart
So with introductions out of the way, we can really get into some real content beyond the simple niceties of the new year and unsustainable resolutions. However, figuring out where to start with real content was actually not clear cut to me. Even after narrowing down all the options, I was left with two really good concepts: The Stock Market or Gross Domestic Product (“GDP”).
While both of these concepts would be great openers because they are:
Broad concepts
Talked about a lot
Good umbrella topics to lead into other topics
I ultimately decided to kick the newsletter off with GDP because it’s arguably the more elitist way to begin. See, the stock market is cool and all but it’s volatile and reflects prices which are basically just made up numbers fueled by fickle manias of the masses. GDP, on the other hand, is pretty much the favorite child of tweed-jacket wearing economists sitting in their ivory towers.
So, here is a chart of what GDP looks like as a line:
Now, I said that I wanted this blog to be accessible, so if you’ve never seen a chart before here is the deal:
The main blue line going up from left to right is GDP
The vertical numbers on the side from 0 to 20 are $USD in Trillions
Across the bottom is time, from January 1, 1960 to September 30, 2019 (I only show years because it would be kind of crazy to try to put all the little dates in)
Below the years I have the data source, so you can go check my work if you don’t believe me, and also when I gathered it
Also in the bottom is my sweet logo I made for myself since it’s all about branding these days and so if someone wants to steal my chart they will have to open paint and use fill to make it all white and I like being difficult to those who mean to do me harm
At the top is a handy title and I will explain what “Real” is another time and hopefully people know the United States (big country, lot of GDP, good burgers)
Within the chart there are some shaded areas, which represent recessions (another topic for later)
I also wrote a bunch of random stuff with arrows to give a super quick description of the recessions (again, another topic for another day)
The picture itself is a rectangle, which I chose because it seemed like a nice shape for this kind of stuff
Any other questions?
Oh, yeah, what IS GDP though? While it’s easy to look it up and get a lot more information, I basically just think of it as all the “stuff” made in a country in some time period, usually a year. So, looking at the chart, if you take the top of the line at the right it is around 19 trillion dollars. Basically, that’s the total value of all the goods and services made in the United States. And, it grows over time because there are more people and we have technology and a bunch of other reasons.
So, now we have a solid base to build on. We know how charts work and also that there is a lot of stuff we make and we call it GDP and there is a way to measure that stuff and we can see how much stuff we make now versus how much stuff we used to make. But what exactly is that “stuff?” I’ll take a deeper dive into the components of GDP in the next post.