This is a discussion of Part 2 of the GDP, Personal Income and Growth study first discussed two weeks ago. For this part of the study, we compared percent changes in Nevada GDP to those of each component of Nevada personal income between 1970 and 2009. The model shows that a 1% increase in per capita net earnings increased Nevada GDP by 0.7%. However, a 1% increase in per capita current transfers decreased Nevada GDP by 0.14%. A 1% increase in per capita dividend, interest and rental income decreased Nevada GDP by 0.02%. This is an interesting finding and a useful one as the State continues to develop its economic growth and development strategy.
The analysis shows that job creation will help drive the health of this economy. However, attracting a population which receives its income from investments, governmental or retirement payments at the expense of jobs may lead to the decline of State GDP.
For detailed study results, please click here.
We recently completed a study of the impacts of national, state, and internal changes on the health of Nevada’s economy, as defined by its GDP. This study has two parts. The first part looks at the impacts of changes in national and California GDP on Nevada GDP. The second part looks at the impacts of the changes in the composition of Nevada personal income on Nevada GDP.
The analysis of the impact of changes in national and California GDP on Nevada GDP shows a significant relationship between these variables. The study showed that a 1% increase in US GDP will increase Nevada GDP by 1.11%. A 1% increase in California GDP will increase Nevada GDP by 0.9%. This makes much sense as Nevada is part of the US economy and has close trading, employment and other economic relationships with California.
It is important to realize the magnitude of this relationship in formulating economic development strategies for the State, much of the growth in the Nevada economy will be outside of the area of control for Nevada lawmakers.
For the full study, please click here.