Summary: Macroeconomics | 9781787265418 | Blan chard, et al

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• 3 The goods market

• 3.7.1.1 Europe and the Euro

• At which free variables do economists look first, when studying an economy?

  
  

  • Output
  • The unemployment rate
  • The inflation rate

• The economic performance of European countries after the turn of the millennium has not been as good as it was in the 1990s, what are 4 characteristics of the period after the millennium turn?

  
  

  • Average annual output growth reflected a significant slowdown in   all of the largest European economies since 2008, and a   recession in 2009.
  • Low output growth was accompanied by persistently high   unemployment.
  • The only good news is about inflation. Average annual inflation   was   1.9% in the EU and 1% in the euro area.
  • In the economies of central Europe inflation jumped during the   transition but it stabilised in the following decade.

• Which three issues dominate the agenda of European macro-economists?

  
  

  • High unemployment
  • Growth of income per person
  • Common currency

• There is still disagreement about the causes of high European unemployment, what is the general opinion of politicians and what of macro-economists?

  • Politicians: often blame macroeconomic policy.
  • Macro-economists: 
  • Most economists believe, however, that the source of  the problem is labour market institutions. 
  • Some economists point to what they call labour market rigidities. 
  • Other economists emphasise the fact that unemployment is not high everywhere in Europe.

• Where do supporters of the Euro point at?

  
  Supporters of the euro point first to its enormous symbolic importance:  after a long history of wars and conflicts,a large number of European countries are now linked by a common currency

• Where do skeptics of the Euro point at?

  
  ... Others worry that the symbolism of the euro may come with some economic costs: the recent crisis that hit the euro and the euro countries is among those costs

• 3.7.1.2 The economic outlook in the USA

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• What can we say about the economy of the USA in the past decades?

  • From an economic point of view, there is no question that the 1990s were amongst the best years in recent memory.
  • In the recent past, however, the economy has slowed down. Data for 2011 do not seem to suggest that the economy has started growing again.

• What are the 3 reasons for the recent slow down in the economy of the USA?

  1. The price of oil reached a historic hight in 2008.
  2. House prices in the USA boomed after 2000.
     
  3. The US trade deficit(=handelstekort) has increased by about 1% of GDP in 1990 to 5% of GDP in 2008.
     

• 3.7.1.3 The largest emerging economies

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• What are the largest emerging economies?

  Brazil, China, India and Russia (which are often called BRICs) have grown rapidly over the last decade and are now the largest economies outside of the group of advanced countries.

• 3.7.2.1 Aggregate output

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• What are an accounting systems used to measure aggregate economic activity?

  National income and product accounts