The Economic Development of the Global Main Economies Which Countries will be the Trend Setters?
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Transcript of The Economic Development of the Global Main Economies Which Countries will be the Trend Setters?
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The Economic Development of the Global Main
Economies
Which Countries will be the Trend Setters?
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Problems with the EU Economy
Lecture #3
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How is the EU Doing on Growth, Unemployment, and Inflation?
Remember that Growth and Unemployment are far more important
than Inflation
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Average or Natural Growth is about 2.2% for the EU
“The EU's economy grew by 1% during the period April to June, according to Eurostat, the EU's statistical office. Growth in the 16
countries of the eurozone was also 1%”
“According to the ECB's September staff projections, eurozone growth will range between 1.4%-1.8% in 2010, and between 0.5%-2.3% in 2011.”
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To reduce unemployment rate by 1%, the EU needs to
grow at a steady 3.7% for one year.
1% reduction in the EU unemployment rate is 2.2 million good stable jobs.
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Interesting Question: Which Country Leads Which in Growth? Does the US
lead the EU or does the EU lead the US?
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The Cross-Correlogram below indicates that the US probably leads the EU. This means that the EU might need the US to recover substantially before it can recover. Just a thought.
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How is the EU doing with respect to unemployment -- in comparison with
the US?
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US unemployment is low and Very Unstable, or
Cyclical
EU unemployment is relatively higher and
more stable
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What is the Recent EU Record on Inflation?
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Stable inflation is very important since the main costs of inflation occur when the rate
of inflation becomes variable and highly unpredictable.
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Inflation in the EU has been very stable at or below 2%. There does not seem to
be any danger of deflation in the EU right now.
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