Gdp and Olympic Success

GDP is defined as the total value of goods and services produced within a territory during a specified period, regardless of ownership. GDP differs from gross national product (GNP) because it does not take into consideration transactions done within a country. Nominal GDP refers to the total amount of money spent on GDP. While real GDP changes this value to effect inflation in order to estimate the actual quantity of goods and services making up GDP. GDP measures only final goods and services, which are those goods and services that are consumed by their final user, and not used as an input into other goods. By measuring intermediate goods and services it would lead to double counting of economic activity within the country. This characteristic also removes transfers between individuals and companies from GDP.

GDP is generally calculated by the following equation:

GDP = private consumption + government spending + investments − net exports

Private consumption includes most expenditures of households such as food, rent, medical expenses and so on.

Government spending accounts for sum of government expenditures on final goods and services. It includes salaries of public servants, purchase of weapons for the military, and any investment expenditure by a government. It does not include any transfer payments, such as social security or unemployment benefits. The relative size of government expenditure compared to GDP as a whole is critical in the theory of crowding out, and the Keynesian cross.

Investment refers to business investments in capital. Examples of investment by a business include construction of a new mine, purchase of software, or purchase of machinery and equipment for a factory. Investment in GDP is meant specifically as non-financial product purchases. Buying financial products would be classified as saving in macroeconomics, instead of investment. The distinction is (in theory) clear: if money is converted into goods or services, without a repayment liability it is investment. For example, if you buy a bond or share the ownership of the money has only nominally changed hands, and this transfer payment is excluded from the GDP sum. Although such purchases would be called investments in normal speech, from the total-economy point of view, this is simply swapping of deeds, and not part of the real economy or the GDP formula.

NX are "net exports" in the economy (gross exports - gross imports). GDP captures the amount a country produces, including goods and services produced for overseas consumption, therefore exports are added. Imports are subtracted since imported goods will be included in the terms G, I, or C, and must be deducted to avoid counting foreign supply as domestic.

The modern Olympic Games were founded in 1894 when Pierre Fredi, Baron de Coubertin sought to promote international awareness through sporting competition. The first games, held in Athens in 1896, attracted just 245 competitors, and more than 200 were Greek. Out of those numbers only 14 countries were represented. Although this doesn’t appear to be much, no international events of this size had ever been organized before. Four years later (in 1900) the Paris games attracted more than four times as many athletes, including 11 women, who were allowed to compete for the first time, in croquet and tennis. The Games were mixed together with the Paris World's fair and lasted over 5 months. Numbers declined again for the 1904 Games in St. Louis, USA, mostly due to the fact that back in the early 1900’s, it wasn’t nearly as easy to cross the Atlantic as it is now. There followed a smaller games in Athens in 1906. These games are not currently recognized as being Olympic Games by the IOC, though many would disagree with this decision. Anyway, they undoubtedly contributed to the success of future Olympic games. The Games continued to grow, attracting 2,500 competitors to Stockholm in 1912, including the legendary athlete Jim Thorpe, who won both the decathlon and pentathlon. The Olympics has exponentially grown in both the number of competitors and spectators (excluding the years of the world wars).

The Olympics has always been used as a way for countries to show their true “power”. This especially held true during the infamous Cold War between the USA and the former USSR. The hockey game that was played between the two was not only seen as a game, but almost as the only battle that ever occurred during the cold war. When the USA pulled off this amazing upset, it was used to spark a huge sense of patriotism among the country, almost as if we really had won a true life and death battle.

"If you're on the poverty line, you don't have a lot of time to invest in sports," said John Hawksworth, head of macroeconomics