Essay Sample on U.S. Economy Evaluation: DPI & PCE Chained Dollars

Introduction

Disposal personal income (DPI) per capita chained dollars and personal consumption expenditures (PCE) per capita chained dollars have been used as significant metrics for the evaluation of the economy of America. They are applicable in the event of the comparison between the income of the Americans and the amount they spend on goods and services. DPI refers to the discretionary income amount that an individual has to purchase the products and services. A higher measure of disposable income implies that there is a generally higher consumer-spending amount ("Personal Income and Outlays, May 2019 | U.S. Bureau of Economic Analysis (BEA)", (2019). The metric is usually compared with the occurrence of inflation for real disposable income per capita. PCE the other hand refers to the measure of national consumer spending. It is used to reveal the amount of money that Americans spend on their purchased goods and services. The two metrics are used when undertaking the concept of chained dollars, which is a strategy for the adjustment of amounts of the real dollar. The ideas are generally utilized while tracing the extent of income and expenditure from some years back.

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The Data Methodology Description

The methodology adopted in evaluating the PDI and PCE takes the form of data presentation. The data on income and expenditure for the chained dollars are gathered from various sources, including the official American websites. The information is presented in the visual forms, including both tables and graphs, which show the trend and the implications on the economy of America. Feldstein (2017) argued statistical techniques take the aspect of chained dollars as the center of interest which is for the determination and the evaluation of the extent to which the real dollars are adjusted in response to income and expenditure in the country.

Other aspects of the methodology consider the distribution of the chained dollars across the years by examining the changes that they have recorded from the mid 20th century to the present. The graphs and table considering the data in this area show the advancement of the expenditures relative to income for five years. The research and presentation on the same discussion the economic concept of gross domestic product, which will further be forwarded for follow up research activities ("What Do Americans Spend Their Money On?", 2019). The data from the concept is used to determine the extent and impact of the interaction between the market and the flow of disposable income among the citizens. The focus of the research in this aspect will be to determine the market value concerning the willingness of the citizens to spend a given portion of their income.

The methodology also considers the critical points in history in which the concept of chained dollars had the most significant impact on the economy of America. These include years like 1996 and 2012 and some of the few years, which later gave rise to the concept of chained 2012 dollars. According to Stock and Watson (2017), the chained 2012 dollars has been changing over time, attracting the attention of the government while trying to manage the economy of the United States. On this note, the methodology has also covered the comparison between the personal disposable income against the personal consumption expenditures, including the patterns and the types of goods and services popularly purchased by the citizens.

Personal Income and Outlays

Data on the findings from the methodology reveals that Personal income has increased significantly with positive progress every year. The $88.6 billion, representing 0.5 percent, in 2019 shows that the citizens have a high potential of spending highly since the portion set aside for expenditure is equally significant (Stock & Watson, 2017). An equal percentage has also been recorded in the part of the expenditure showing that America has achieved a high market value; this occurs due to the high disposable consumption expenditure. The increase in the disposable income per capita chained dollars implies that there is a continued increase in the benefits and salaries among the citizens. It therefore follows that the Disposal personal income (DPI) per capita chained dollars and personal consumption expenditures (PCE) per capita chained dollars are essential concept Disposal personal income (DPI) per capita chained dollars and personal consumption expenditures (PCE) per capita chained dollars in the American economy and the latter is determined by the former.

Conclusion

The Disposal personal income (DPI) per capita chained dollars and personal consumption expenditures (PCE) per capita chained dollars are some of the strategies, which are related and are used to evaluate the progress made by the American economy. The changes in the expenditure usually depend on the advances in income. The benefits and salaries have influenced the profits of the citizens positively. Subsequently, spending has increased; hence, the market value has also made significant steps in the country.

References

Feldstein, M. (2017). Underestimating the Real Growth of GDP, Personal Income, and Productivity. Journal Of Economic Perspectives, 31(2), 145-164. doi: 10.1257/jep.31.2.145

Personal Income and Outlays, May 2019 | U.S. Bureau of Economic Analysis (BEA). (2019). Retrieved 28 September 2019, from https://www.bea.gov/news/2019/personal-income-and-outlays-may-2019

Stock, J., & Watson, M. (2017). Twenty Years of Time Series Econometrics in Ten Pictures. Journal Of Economic Perspectives, 31(2), 59-86. doi: 10.1257/jep.31.2.59

What Do Americans Spend Their Money On?. (2019). Retrieved 28 September 2019, from https://www.thebalance.com/personal-consumption-expenditures-3306107