Influenza A virus subtype H5N1 professor emails me:
My students have the pleasance to utilisation your economics textbook. I accept 1 question: where the symbol "Y" for gross domestic product comes from? All the others, nosotros could detect, such every bit NX , NCO, etc. My students are curious, as well as I could non plough over them a good answer.
My unsatisfying response:
To last honest, I don't know. It is an former convention to utilisation Y to announce existent GDP, as well as I am only next that. But I don't know where or why the convention began.If anyone knows the history as well as argue for this notation, delight e-mail me.
Update 1: Several people e-mail me that the usage goes dorsum to the early on Keynesians, which is for sure true. Others propose that Y is the generic subject variable, every bit inwards y=f(x), which seems an unlikely explanation to me. Still others indicate out that I is already used for investment, which is truthful but does non explicate the selection of Y for income as well as output. Some enjoin Y stands for "yield," which seems a useful mnemonic, but I accept never seen that give-and-take used to clitoris gross domestic product inwards a touchstone published source. So I notwithstanding don't accept a fully satisfying answer.
Update 2: One someone writes:
I thought it was good understood that 'Y' is the symbol for existent gross domestic product because it is brusk for "Income" every bit inwards "National Income." Since 'I' is already used for other macroeconomic variables, nosotros utilisation the missive of the alphabet that is phonemically or orthographically related to 'I,' namely 'Y' (which is known inwards languages similar French as well as Castilian every bit "Greek i").
Maybe this is the correct answer, but 1 affair I am sure of is that this is non "well understood," at to the lowest degree non past times readers of this blog, judging from the many other emails I received.
Update 3: Influenza A virus subtype H5N1 Harvard pupil looks at the history:
The earliest reference to gross domestic product every bit "Y" I could let on is Kalecki 1937. The showtime articles to formalize the IS-LM model (Hicks 1937, Harrod 1937, Meade 1937) all seem to refer to national income every bit "I" (for income), as well as Cobb Douglas (1928) calls it "P" (for production). I'd last curious to encounter if anyone tin let on an earlier reference to "Y" than Kalecki 1937. It appears at that spot every bit Y=f(I) (income every bit a purpose of investment), which seems similar a vote inwards favor of the y=f(x) declaration (but I grip that's non a really satisfying explanation).Update 4: A reader directs me to an former missive of the alphabet from Keynes to Hicks (dated March 31, 1937). Keynes writes:
“On 1 indicate of detail. I regret that you lot utilisation the symbol I for Income. One has to choose, of course, betwixt using it for income or investment. But later on trying both, I believe it is easier to utilisation Y for income as well as I for investment.”
