Friday, September 14, 2012

iPhone 5 and Keynesian Economics

Analysts at JP Morgan released a report that argues that Apple's release of the iPhone 5 could potentially increase GDP growth in Q4 by 1/4-1/2 percentage points.

1. The report projected that, given last year's 4S sales, Apple will sell an enormous amount of phones in the 4th quarter, given the fact that the iPhone 5 launch is expected to be bigger.
2. Although iPhones are manufactured overseas, the majority of the price you pay is domestic value-added (retail, advertising, profits).

Is the JP Morgan report convincing? If so, what does it say about the state of the U.S. economy?

Krugman is calling it "The iPhone Stimulus"

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