Friday, June 24, 2016

Dow Jones futures crash

At 5 PM ET today, the Dow Jones futures is down nearly 500 points pointing to a huge US markets crash right at the opening. The markets are expected to stay nervous throughout the trading session today mirroring the world markets crash earlier today.

Sunday, June 19, 2016

Relation between Cost of Living and GDP (Nominal and PPP)

Sometimes, it is possible to judge the cost of living by comparing the nominal vs PPP GDP of that country. If the GDP based on PPP basis is far higher than the nominal GDP, it generally means that the cost of living is lower in that country.

For example, India has a $8.6 trillion economy GDP on PPP basis but is only about $ 2.4 trillion Nominal GDP. So, India's cost of living is low. Similarly, Switzerland has a PPP GDP of $ 493 Billion and a much higher, $ 651 Nominal GDP. Thus, Switzerland is very expensive on cost of living basis. Since the USA is the base country, at any given moment of time, in theory, US GDP on nominal and PPP terms is always the same.