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Developments
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
Some basic questions
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
1-1 The European Union
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1.4
• Output
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
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1.5
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2011
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1.6
Figure 1.2 The map provides 2006 data on various countries of Western Europe
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1 st Edition, © Pearson Education Limited 2010
Source: Eurostat
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1.7
Figure 1.3 This map provides basic 2006 data on recent and prospective EU members
and some other countries for reference
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
Sources: Eurostat, IMF, World Bank
Table 1.1 Growth, unemployment and inflation in the EU since 1991
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1.8
Source: Statistical Annex of European Economy, Spring 2009. Data for 2010 are forecasts
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
1-1 The European Union (Continued)
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1.9
• High unemployment
• Common currency
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
1-1 The European Union (Continued)
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1.11 How can European Unemployment be Reduced?
The unemployment rate in continental Europe and the USA since 1970
Figure 1.2
From 2008–2010 GDP growth declined all over the world. In advanced economies
it turned negative
Source: IMF, World Economic Outlook, Spring 2009, p. 1. (Data from 2010 onwards are forecasts.)
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
1-1 The European Union (Continued)
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1.12 How can European Unemployment be Reduced?
Table 1.2 Income per capita in Europe compared to the USA (USA = 100)
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
1-1 The European Union (Continued)
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1.14 What will The Euro do For Europe?
• Supporters of the Euro point first to its enormous
symbolic importance. More importantly, for most
members, there has been much greater stability of
the Exchange Rate (ER) (with much reduced
speculative threats on ER) and significantly lower
transaction costs
1.7 0.95
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1.15
1.6 0.90
1,5 0.85
1.4 0.80
$ per euro
1.3 0.75
1.2 0.70
£ per euro
1.1 0.65
1.0 0.60
0.9 0.55
0.8 0.50
Jan01 Jan 02 Jan03 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2011
1-2 The United States
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1.16
Table 1.3 Growth, unemployment and inflation in the USA since 1991
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
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1.17
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2011
1-2 The United States (Continued)
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1.18 What are the Reasons for the Recent Slow Down?
Table 1.4 Output growth and inflation in the BRIC countries since 1991
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.
Where does the growth come from?
• High accumulation of capital.
• Very fast technological progress.
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
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1.22
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2011
1-4 Looking Ahead
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1.23
These are the questions to which you have been exposed in this
chapter:
• Why is inflation so much lower today than it was in the past? Can
Europe reduce its unemployment rate? Should the United States
reduce its trade deficit?
• Why do growth rates differ so much across countries, even over long
periods? Has the United States entered a New Economy, in which
growth will be much higher in the future? Can other countries
emulate China and grow at the same rate?
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010
Gathering Macro Data
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1.24
• For countries that are not members of the OECD, one of the main
sources of information is the International Financial Statistics (IFS),
published by the International Monetary Fund (IMF).
Blanchard, Amighini and Giavazzi, Macroeconomics: A European Perspective, 1st Edition, © Pearson Education Limited 2010