...8421786 How is public debt related to economic growth and unemployment? In this project different economic factors will be compared with each other to see if any correlations exist between them. These will perhaps explain certain trends and changes we see. The three factors focused on in this report are GDP growth, Government Debt and Budget surplus/deficit. In the data provided there is a very large standard deviation for GDP (see appendix). In both 2009 and 2010 the standard deviation was over four and a half times larger than the average of GDP itself. This will make it hard to create general assumptions for all countries to assess whether different factors correlate with each other. Even other factors such as GDP growth have relatively large standard deviations. This may cause difficulties in examining factors. An example of ambiguous data can be seen when comparing Canada and India. They both had fairly similar GDP and debt figures in 2010 but India’s GDP growth was around three times that of Canada’s. This shows that we cannot make hard-and-fast rules on links between different factors but we may be able to make general connections and assumptions. Distribution of GDP Growth and Government Debt within countries Figure 1: GDP Growth (2009-2010) 60 50 Number of Countries 40 30 20 10 0 Frequency GDP Growth 2009-2010 (% change) As we can see from Figure 1 distribution of GDP growth is relatively small, with 93.4% (171/183) countries having a growth between 0% and...
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...How is government debt related to economic growth and unemployment? Basic Definitions A government's economic position is measured by the GDP (Gross Domestic Product). GDP is the total value of goods and services produced by an economy. When the GDP is positive then we can say that the country has an economic growth, when the GDP is negative then the country has an economic decline. When a government as a whole owes money then we say that there is a public debt, also known as a government debt. In order for the government to reduce this debt some actions have to take place such as increase taxes, cut spending and issue bonds. The government can increase the percentage rate of taxes in order to collect a greater portion of every single transaction...
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...Zhe Sun Giselle Rubi Gilberto Rodriguez Thinh Mai Prof. Slotkin 03/31/16 Economics 1A Essay Questions Midterm #2 1. “A government whose bonds are widely held by the general public is less likely to face violent revolution.” Why might that be the case? Before we answer the first question, we must need to know what a “Government Bond” is. It is a debt security issued by a government to support government spending, most often issued in the country's domestic currency. Federal government bonds in the United States include: the savings bond, Treasury bond, Treasury inflation-protected securities (TIPS), and others. In my opinion, there are three main reasons for this question. Firstly, before investing in government bonds, all of investors need to assess several risks associated with the country such as: country risk, political risk, inflation risk, and interest rate risk. For example, if Americans don't have enough faith and credits to Federal government, they won't buy the Treasuries, debt securities issued by the Department of the Treasury on behalf of it. If the government fund was widely hold by the general public, it means they have faith to the government and they consider it as the safest and most popular choice of investments. And they won't against government with violence. Supposed that if the people overturned the government, they won't get their money that was borrowed by it back. So they usually won't do that. ...
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...CONGRESS OF THE UNITED STATES CONGRESSIONAL BUDGET OFFICE CBO The Budget and Economic Outlook: Fiscal Years 2013 to 2023 Percentage of GDP 120 100 80 60 40 20 0 1940 1945 Actual Projected 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Federal Debt Held by the Public Trillions of 2005 dollars 20 18 16 14 12 10 0 2000 2004 2008 Potential GDP GDP Actual Projected Percent 12 10 8 6 4 2 0 2000 Actual Projected 2012 2016 2020 2024 2004 2008 2012 2016 2020 2024 GDP and Potential GDP Unemployment Rate FEBRUARY 2013 Notes Numbers in the text and tables may not add up to totals because of rounding. Unless otherwise indicated, years referred to in describing the budget outlook are federal fiscal years (which run from October 1 to September 30) and years referred to in describing the economic outlook are calendar years. The figures in Chapter 2 have white vertical bars that indicate the duration of recessions. (A recession extends from the peak of a business cycle to its trough.) The economic forecast was completed in mid-January 2013, and the estimates of 2012 values shown in tables and figures in Chapter 2 and Appendix B are based on information available at that time. Supplemental data for this analysis and the historical budget data that are usually included in this report are available on CBO’s Web site (www.cbo.gov). CBO Pub. No. 4649 Contents Summary...
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...A short history on the economic background of the country United Kingdom is a very old country consists of England, Scotland, Wales and Northern Ireland. In the 18th century, the UK was among the first country in the world to industrialize and during the next century it became one of the dominating countries in the global economy. (Martinez, 2013) In the turn of the century, the UK remains among the great economies of the world trailing behind the US and some European countries. In recent times, the UK service sector makes up the bulk of its GDP with London and Edinburgh as among the biggest and busiest financial centers in the world. Being an old country, UK is bursting with historic monuments, royal palaces museums and some of the world’s cherished heritage sites (UNESCO). Tourism is among the important income generating sectors in its economy with millions of tourist visiting the country from around the world making it a UK £127 billion a year industry and provides employment for about 3 million people ("Britain's tourism industry,”). The United Kingdom’s economic freedom has reached a score of 74.8, making its economy the 14th freest according to the 2013 Index of free economies. It scored 0.7 point higher than its last year’s ranking and reflects efforts to improve the control of government spending. In regional terms, the U.K. is graded 5th in the Europe region. (Kim, Miller , Holmes & Roberts, 2012). Image source: Berkshire - Reading Market Place showing Salmons...
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...1. Introduction Economy of a nation defines the future of its people. It determines whether a country is going to sustain or fail. Economic growth plays a pivoted role in improving nation’s gross happiness and ameliorating the lifestyle of its people. Economic growth is defined as “The value of all the products manufactured and sold in a country of the course of one year along with everything that people do and get paid for, all that amounts to the economic growth.” (Sandford and Bradbury, 1970). When people earn more money and then buy more products and services the economy grows. Politicians also want to see the economy grow, that’s why they work towards achieving greater employment, state prices and a balance between imported and exported goods. More growth means more money. The economic growth should be achieved in a way that it must reach to the point where the economy has finally matured. The resources that industries require are limited and the need for raw materials often doesn’t take nature into account. That is why rapid or poorly planned economic growth starts to have bad impact on quality of life, that’s why countries like Germany, Bhutan etc. plan their economic policy keeping in mind about nature’s safety and gross domestic happiness (Rodrik, 1996). 2. Economic Policy An economic policy is a very complicated area but it can be categorized into following major areas 1) Fiscal Policy: which refers to government’s budget. In other words, it deals with...
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...Criteria for evaluating macroeconomic performance Rising living standards – economic growth o Tendency for the level of output (i.e. quantity and quality of goods and services) to increase over time o There is an upward trend in living standards (as evidenced by GDP per capita) in Australia over time (up from roughly $32000 in ’73 to around $64000 in ’09) o Although fluctuations in the business cycle do occur, the downward swings are not as significant as the overall upward trend Stable business cycle o Short run business cycle The tendency for economies to pass through periodic periods of economic expansion followed by economic contraction o low volatility in fluctuations of actual output around its trend or potential output. o Volatility of Australian growth rate (as evidenced by the SD of Aust’s real quarterly GDP growth rate) has decreased over time) o Great Moderation Large fall in volatility of real output Causes (debated) Shocks to ec have decreased over time Ec. has become more stable due to changes in institutional arrangements Economic policy makers have become better at reducing fluctuations in the business cycle Relatively Stable Price Level o low (positive) rate of inflation o RBA’s inflation target is 2-3% Sustainable levels of Public and National debt o Public debt borrowing by public sector from private sector Influenced by government budget deficits/surpluses o National debt borrowing by domestic residents from foreign countries Domestic residents...
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...Macroeconomics Assignment How a rigid Fiscal Policy saved Australia from the Global Financial Crisis TABLE OF CONTENTS: |Item |Heading |Page Number | |1. |Introduction | | |2. |Theoretical Concepts: | | | | | | | |2.1 Economic Growth | | | |2.2 Aggregate Demand and Aggregate Supply | | | |2.3 Fiscal Policy | | | |2.4 Monetary Policy | | | |2.5 The Impact of Unemployment | | |3. |Related Policy Issues | | |4. ...
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...discuss the effect of external debt on economic growth with four areas, the effect on private local investment, foreign direct investment, government expenditure and export growth. Three theoretical models are adopted, namely Debt Overhang Theory, Liquidity Constraint Hypothesis and Crowding-out Effect respectively. Two policy implications on debt relief and debt restructuring are analyzed. And finally, the paper will include the discussion on the necessary tradeoff with inflation and contractionary fiscal budgeting after debt servicing. KEY Words: Heavily In-debt Poor Countries (HIPC), External Debt/Foreign Debt) Sustainability, Debt-GNI Ratio, Debt-Export Ratio, Debt Service Ratio Word count (excluding table of content, tables and reference): 2974 Topic: The Effect of External Public Debt in Developing Countries on Economic Growth - An Empirical Study on Argentina Abstract P.1 1. Introduction P.3 1.1 Literature Review P.4 1.2 Structure and Magnitude of External Debt of Argentina P.4 1.3 Theoretical Relationship between External Debt and Economic Growth P.6 1.4 Research Question(s) and Framework P.7 2. Data Collection and Empirical Analysis P.7 2.1 The effect of external public debt on: ...
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...ECON 102 Complete Course (American Public University) IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://acehomework.com/ECON-102-Complete-Course-American-Public-University-1111118.htm?categoryId=-1 If You Face Any Problem E- Mail Us At JohnMate1122@gmail.com 8 – Week Course Outline Please see theStudent Handbook to reference the University’sgrading scale. Table of Contents Week Topic(s) Learning Objective(s) Reading(s) Assignment(s) 1 Introduction to Macroeconomics • LO 1: Describe the characteristics of demand and supply, and apply the demand and supply model. • LO 2: Define real gross domestic product and identify the phases of a business cycle. • LO 3: Define inflation and deflation, and explain how each affects the price and economic growth of an economy. • LO 4: Articulate why the price-level changes and how it can affect economic stability. • LO 5: Explain how unemployment is calculated and measured in the United States. • LO 6: Demonstrate an understanding of the role of the government in the economy. • LO 7: Identify the components of the macroeconomy and relate them to the circular flow diagram. Describe the characteristics of demand and supply, and apply the demand and supply model. Unit 1 http://www.saylor.org/courses/econ102/ DQ1: Self Introduction and Understanding Plagiarism. DQ2: The three primary concerns in macroeconomic analysis. Please submit your responses to DQ1 and...
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...ECON 102 Complete Course (American Public University) IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download http://acehomework.com/ECON-102-Complete-Course-American-Public-University-1111118.htm?categoryId=-1 If You Face Any Problem E- Mail Us At JohnMate1122@gmail.com 8 – Week Course Outline Please see theStudent Handbook to reference the University’sgrading scale. Table of Contents Week Topic(s) Learning Objective(s) Reading(s) Assignment(s) 1 Introduction to Macroeconomics • LO 1: Describe the characteristics of demand and supply, and apply the demand and supply model. • LO 2: Define real gross domestic product and identify the phases of a business cycle. • LO 3: Define inflation and deflation, and explain how each affects the price and economic growth of an economy. • LO 4: Articulate why the price-level changes and how it can affect economic stability. • LO 5: Explain how unemployment is calculated and measured in the United States. • LO 6: Demonstrate an understanding of the role of the government in the economy. • LO 7: Identify the components of the macroeconomy and relate them to the circular flow diagram. Describe the characteristics of demand and supply, and apply the demand and supply model. Unit 1 http://www.saylor.org/courses/econ102/ DQ1: Self Introduction and Understanding Plagiarism. DQ2: The three primary concerns in macroeconomic analysis. Please submit your responses to DQ1 and...
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...The Resolution to Raising the Unemployment Rate in the United States Precious Johnson CM 104-04 Professor Johnson 8/24/2010 The Resolution to Raising the Unemployment Rate in the United States There are a lot of things in life that are not guaranteed or secure, therefore people should live their life to the best of their ability. Everyone wants the feeling of job security, but the reality is there is none. The rising unemployment rate amongst the United States citizens has been a major problem for a few years now that is greatly affecting our economy. The problem of the rise in the unemployment rate in the U.S can be solved by big business’ creating more jobs in their companies, banks approving more business loans for small businesses, and the government giving out stimulus packages to the people to help boost the economy. This is a problem that must be solved if the United States wants to move forward in a better economy. The spike in unemployment has pushed some private sectors to create more positions within their company, but it still isn’t enough to improve this difficult time the U.S. is facing. Irwin and Montgomery (2010) reported “private employers added only 83,000 jobs in June, the government said Friday, too few to keep up with growth in the working-age population” (p. 1). The employment rate is not getting better, but it is dropping at a slow gradual rate. Americans have practically given up on joining the labor force altogether...
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...This essay will talk about what is currently going in Europe with the Eurozone sovereign debt crisis and the fiscal state the European Union is in, it is important and interesting because it is still current affairs and there are various factors and decisions that have helped the path that the crisis is going in, this essay will look at the crisis but on the implications and problems that European union face as well as what they have faced already and whether the European Central Bank are doing enough to improve the situation and what their plans are for the future. A sovereign bond serves as a floor for interest rates banks charged for loans and for the pricing of other financial contracts and securities. The global financial crisis led to the deterioration of government budgets and finances as nations utilized public expenditures to provide stability and stimulus. The Eurozone suffered because of heavy borrowing practices, property pebbles and living above their means. The Eurozone debt crisis started because Greece who had borrowed heavily in international capital markets over the past decade were turned against by investors this is because Greece in 2009 admitted that they had double the amount of debt that was allowed in the Eurozone limit. Ratings agencies started to downgrade Greek bank and government debt, and there was fear of Greece defaulting and not being able to pay back its debts but the Greek Prime Minister George Papandreou insisted otherwise however this was not...
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...GREEK ECONOMIC CRISIS: CAUSES & EFFECTS Objective: To study the factors that lead to the Greek Economic Crisis and its effects on other other countries including India. A. IMPORTANCE Greece is normally known for mythology and coliseums, but for the past year, and probably well in to the future, Greece is making headlines for less mythical reasons. Greece has earned the reputation of being that family member who can't seem to get out of money trouble and, in turn, is always asking for a loan. Also, like that same family member, the chances of getting that money back isn't high. Greece is on the brink of bankruptcy and many economists believe that they are already bankrupt. Greece's debt has reached 160% of their gross domestic product. When debt reaches 100% of gross domestic product, it is cause for major concern. What's worse, they don't have the capacity to do much about it. Greece can't artificially change the buying power of their currency because they are part of the eurozone, and they can't easily raise taxes because they don't have an efficient or well-developed system of collecting taxes. If all of that isn't enough, the citizens of Greece are growing increasingly upset with their government, which is causing political turmoil as well as economic. Greece owes so much money to other countries that each citizen owes $40,000! 1. We Live in a Global World The world is no longer a collection of countries, many of which have little effect...
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...Credible Keynesianism?: New Labour Macroeconomic Policy and the Political Economy of Coarse Tuning Ben Clift & Jim Tomlinson The article has been accepted for publication in the British Journal of Political Science © Cambridge University Press, 2006. Forthcoming, Volume 36 (2006). Material on these pages is copyright Cambridge University Press or reproduced with permission from other copyright owners. It may be downloaded and printed for personal reference, but not otherwise copied, altered in any way or transmitted to others (unless explicitly stated otherwise) without the written permission of Cambridge University Press. Hypertext links to other Web locations are for the convenience of users and do not constitute any endorsement or authorisation by Cambridge University Press. Ben Clift, University of Warwick b.m.clift@warwick.ac.uk http://www2.warwick.ac.uk/fac/soc/pais/staff/clift Jim Tomlinson, University of Dundee j.d.Tomlinson@dundee.ac.uk Abstract This article questions prevailing interpretations of New Labour’s political economy. New Labour’s doctrinal statements are analysed to establish to what extent these doctrinal positions involve a repudiation of Keynesianism. Although New Labour has explicitly renounced the ‘fine tuning’ often (somewhat problematically) associated with post-war Keynesian political economy, we argue that they have carved out policy space in which to engage in macroeconomic ‘coarse tuning’ inspired by Keynesian thinking. This capacity...
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