Macro - Examples Flashcards
Interest rates
Low - UK 0.1%. Japan at -0.1% in 2016 to boost consumption after ‘death spiral’ of deflation due to housing crash.
India has helped keep AD up to support heavy growth
High - Argentina 25%
Consumer Confidence
Increased consumption
High - US, Eurozone
Low - UK due to Brexit
House Prices generating wealth effect
High - UK, US
Indebtedness
Low = Germany (save to spend culture)
High - UK, US
Real Disposable Income
High - Australia
Low - Brazil, Russia, Venezuela
Income tax
High - Sweden, Norway
Low - US, Trump cut tax for middle class
Business Confidence
High - US
Low - UK
Corporation Tax
High - UAE (55% only on Oil and Gas companies, none on anything else)
Low - Ireland (12.5%), US (Trump cut from 35% to 20%)
Gov. Spending
High - France
Low - UK during austerity after 2008. Greece.
Ireland but once they came out growth boomed due to huge fiscal surplus generated. GDP per Capita now high.
Exchange Rates
Weak - Pound due to Brexit, Russia, Brazil went into recession due to weak ER
Strong - Australian dollar
High commodity prices
Shifting SRAS Left
Oil shock in UK 2009
High Wages
Shifting SRAS Left
UK (Living wage), USA
sales tax
UAE introducing VAT (5%) Shifted SRAS left
Japan increases in 2014 caused a recession
Falling commodity prices
Issues for countries who are big exporters of them
Venezuela, Russia, Zambia (copper)
Stagflation
High inflation with stagnant growth
Venezuela, Argentina
Benefits of Growth
China, India, Ireland (after austerity stopped leading to high GDP per capita)
Costs of Growth
India (in 2017 73% of growth went to top 1%. Only 1% went to bottom 50%)
Nigeria income inequality due to corrupt gov.
Demand-Pull inflation
China early 2000s
Cost-Push Inflation
Argentina, South Africa
Deflation
Japan due to banking crisis in the 90s (death spiral)
Greece
Inflation
Huge inflation in Argentina
Cyclical Unemployment
South Africa
Structural Unemployment
South Wales due to collapse of mining
India - 50% of population is under 25, huge surplus of workers with degrees
Real wage unemployment
UK living wage. Companies looking to replace low paid workers with machinery
Costs of unemplyoment
Greece
Low income inequality
Norway, Sweden
High income inequality
Nigeria, India
Absolute Poverty
Ethiopia
Relative poverty
UK, US
Quantitative Easing
Japan, UK, US
Tax Rises
Australia raising income tax on highest earners to fund healthcare
Globalisation
Winners - China, India, Gulf States (UAE)
Losers - Sub-saharan Africa
Protectionism
US - Tariffs on Chinese goods such as steel and chinese retaliation
Current Account
Surplus - China, Germany
Deficit - UK, US
Interventionism
Success - Rwanda
Failure - Zimbabwe, Zambia. Stalled the economy
