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Long question on GDP and government intervention
Posted on 8/27/15 at 12:07 am
Posted on 8/27/15 at 12:07 am
I have watched the Chinese enact many major policies this year to help their economy, including rate cuts and currency devaluation. They are desperately trying to improve the economy. The Chinese downturn has been estimated to have gone from 7% GDP growth to maybe 3.5% (real numbers difficult to know given Chinese policies), and their stock market has lost huge percentages, but given the previous fast growth, it recently only put them back to their January stock numbers. In that context it seems like they have gone from awesome growth to slow growth. Is it necessary to enact those previously mentioned governmental interventions in that case?
I guess my question might be: is the size of the GDP decrease more important than if it actually goes negative? Like is going from 10% to 4% worse than from 1% to -1%?
I guess my question might be: is the size of the GDP decrease more important than if it actually goes negative? Like is going from 10% to 4% worse than from 1% to -1%?
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