MACROECONOMICS part 1

GDP is the most common term used when we talk about the economy of the country. It basically measures the total market value of all final goods and services produced within the nation’s geographical boundary during a given period of time.  The total market value means the monetary value of goods and services at current prices. 

Now the GDP and health of the economy can easily change with the staging of a large scale event. A huge upcoming event is the FIFA World Cup 2014 which will be held in Brazil. This event has crated quite a stir in the public as some are protesting about the large amount used for this instead of using it for the country and the people. Here is an article relating to the topic which gives a brief summary about the two sides arguing about the situation.

  

Brazil paying a high price as it prepares for World Cup 2014

An argument has risen between two kinds of people which are the empire-builders and the naysayers. The empire-builders are typically those people and organisations that have a vested interest in the success of an event like the World Cup. These can include consultants, sponsors, suppliers, hospitality partners, even some media. For them, the bigger an event looks, the better able they are to justify and explain their involvement in it.

This is especially the case if the sustainability of the core business in question depends on securing and successfully hosting sporting mega-events. At times, therefore, such people and organisations can be prone to making rather grandiose claims about the impact that sporting mega-events can have.

In the opposing corner, the naysayers often include academics and disgruntled pressure groups. They typically argue that event impacts are overestimated in the interest of big business, and that there is no compelling science to underpin the investments made in an event like the World Cup in Brazil.

Accurately identifying the economic impact of sporting events would require clear and consistent international standards of measurement. For the time being though, it is left for stakeholders to speculate and prevaricate, which often takes the debate in directions that are neither productive nor helpful.

Refer to this link for more of the article: http://theconversation.com/brazil-paying-a-high-price-as-it-prepares-for-world-cup-2014-15536

The article clearly shows the divide in the public of Brazil. The cost of hosting such a big event is very high. This high cost increases the government spending and this directly affects the GDP causing it to increase. If the GDP increases the shows that employment is also increasing which is a good thing. The increase in GDP also gives an increase in income for the country. 

Therefore in my opinion i would support the empire-builders but then again the GDP is never always accurate so opinions are always differentiated.

Written by : Umeshshanker Thulasaidas