Analysis of Taking the Pulse of the Economy Article by Landefeld - Essay Example

GDP estimation in the US begins with a best-level estimate that is usually produced once every five years. It is typically calculated on an annual and quarterly basis. The annual estimates use data collected from surveys done by the National Census Bureau’s covering about 150,000 reporting units.

On the other hand, the quarterly estimates come from the monthly surveys done by the Census Bureau covering about 35,500 reporting units (Landefeld et al. 4-5). The estimates done every five years also incorporate new definitions and ideas that update the accounts to keep with up-to-date with changes in the economy. A method called “commodity-flow” is, for example, used by the Bureau of Economic Analysis to develop best-level estimates for final sales based on product category (Landefeld et al. 7). The bureau also uses price-times quantity method to provide estimates for products with inconsistent data (Landefeld et al. 9). Estimates for investment, exports, imports, and government components also have their unique methods of determination.

The final expenditures for the federal government, for example, are determined using budget data (Landefeld et al. 11-19). There are, however, several challenges associated with GDP measurement and determination of national accounts. There is not enough data for measuring sector services. There are also components that are difficult to value. There is, therefore, a need to develop comprehensive estimation methods that can value all products by virtue of their nature (Landefeld et al. 22)The article is informative and provides detailed information concerning GDP and the methods used in its estimation.

I particularly appreciate the author’s contribution in detailing the history behind the development of the framework that estimates GDP. It is, however, unfortunate that in spite of the developments starting as early as 1930, the estimation of the GDP and national accounts still faces several hurdles. With continued studies and research in the field of economics, I believe comprehensive frameworks that can evaluate all components will be developed.