Economics+Statistics

= Economic Statistics =

• the global economy • Gross World Product • globalisation – trade – investment and technology – finance – labour • the international business cycle // Trade and financial flows // • changes in the size, pattern and direction of trade and investment • the foreign exchange market • the main participants in foreign exchange markets • the impact of changes in trade and financial flows on economies ** Impact of globalisation on the standard of living in the global economy ** // Variations in the standard of living in the global economy // • income and Quality of Life indicators // Contrasts in levels of development // • difference between growth and development • reasons for differences between nations • developing economies, Newly Industrialised Countries (NICs), transition economies, high income economies // Impact of globalisation // • international convergence • economic growth, development and the quality of life • trade, investment and transnational corporations • distribution of income and wealth • environmental consequences • financial markets • the international business cycle • implications for government economic policies. //Case study // ||  ||
 * **Topic one ** || **Appropriate statistics ** ||
 * // Nature of the global economy and globalisation //

// Value, composition and direction of Australia’s trade and financial flows // • trends in Australia’s trade pattern
 * **Topic two ** || **Appropriate statistics ** ||
 * ** Australia’s trade and financial flows **

• trends in financial flows

• trends in the size and composition of Australia’s Balance of Payments

** Free trade and protection ** • Australia’s policies regarding free trade and protection ||  ||

• aggregate demand and its components: Y = C+I+G+X–M
 * **Topic three ** || **Appropriate statistics ** ||
 * **// Economic growth //**

• measurement of growth through changes in real Gross Domestic Product

• business cycle — trends

**// Unemployment //** • measurement – labour force

<span style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; tab-stops: list 36.0pt; text-indent: -18pt;"><span style="font-family: 'Times New Roman','serif'; font-size: 11.5pt;">– participation rate

<span style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; tab-stops: list 36.0pt; text-indent: -18pt;"><span style="font-family: 'Times New Roman','serif'; font-size: 11.5pt;">– unemployment rate

<span style="font-family: Arial,sans-serif; font-size: 11.5pt; margin-bottom: 0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">• trends

// Inflation // • measurement — current Australian Bureau of Statistics measure

<span style="font-family: Arial,sans-serif; font-size: 11.5pt; margin-bottom: 0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">• trends

// External stability // • measurement <span style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; tab-stops: list 36.0pt; text-indent: -18pt;"><span style="font-family: 'Times New Roman','serif'; font-size: 11.5pt;">– CAD as a percentage of Gross Domestic Product

<span style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; tab-stops: list 36.0pt; text-indent: -18pt;"><span style="font-family: 'Times New Roman','serif'; font-size: 11.5pt;">– net foreign debt as a percentage of Gross Domestic Product

<span style="margin: 0cm 0cm 0pt 36pt; mso-list: l0 level1 lfo1; tab-stops: list 36.0pt; text-indent: -18pt;"><span style="font-family: 'Times New Roman','serif'; font-size: 11.5pt;">– net foreign liabilities as a percentage of Gross Domestic Product

<span style="font-family: Arial,sans-serif; font-size: 11.5pt; margin-bottom: 0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">• trends ||  || • Federal Government Budgets and budget outcomes
 * **<span style="font-family: 'Arial','sans-serif';">Topic four ** || **<span style="font-family: 'Arial','sans-serif';">Appropriate statistics ** ||
 * // Fiscal policy //

<span style="font-family: Arial,sans-serif; font-size: 11.5pt; margin-bottom: 0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">• effects of budgetary changes on resource use, income distribution and economic activity

// Monetary policy //

<span style="font-family: Arial,sans-serif; font-size: 11.5pt; margin-bottom: 0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">• implementation of monetary policy

// Structural change // <span style="font-family: Arial,sans-serif; font-size: 11.5pt; margin-bottom: 0pt; margin-left: 0cm; margin-right: 0cm; margin-top: 0cm;">• effects of microeconomic policies on individual product and factor markets and the economy $US38,800bn-54,580bn (99-07) Since 03, World Bank changed to GNP, hence, GWNP (07) $US65,750bn Global growth averages around 5.0% Goods and Services Trade as % of GWP rose from 12% to 32% (64-07) Half world exports are from top 9 countries (15% of nations account for 70% of trade) Australia accounts for approx. 1% of world trade Only 1% of forex transfer is for trade The 3 decades following 1975 saw: Int. trade expand twice as fast as RGWP growth Int. direct investment grew 3 times faster than RGWP (prior 2001) Int. equity investment grown 10 times the rate of RGWP FDI rose 17.8% to $US1.5tr Dominates (stats too complex) 76% of Australians now use internet compared 5.3% in Africa and 14% in Asia 1.2bn people (20%) live on less than $US1/day China 11.4% India 9.2% CIS (Commonwealth of Independent States) 8.5% Global economy contracted as a whole by 0.6%. AIE contracted by 3.2%. Unemployment at peaked around 10% for OECDs, Spain et al even reaching 20% China dropped from 9.6-9.1% growth projected at 10.% in 2010 Aus: Year to 12/09 was 2.7% growth, projecting 3.25% 2010/11 Global trade shrunk by 10.7% (09) 5 years to 2008/09 saw TOT rise 47% Fall of 20% in 09 but forecasted rise of 14.25% in 2010/11 One negative quarter 0.7% contraction in the Dec 08 quarter RBA estimates 3.25% growth in 2010, 3.75-4.0% in 2001 (Deficit reduction $54.8bn to 39bn). (projected to (12/13) at approx. $1bn) // MRRT  // – 30% levy on non-renewable resource projects // Company tax cuts  // from 30% to 29% (improve long run Ec. Perf.) // Superannuation guarantee  // increase from 9 to 12% (2019) Interest bearing income up to $1000- // 50% discount // to encourage saving. CPRS is undecided Currently 4.5% and set to rise Reached 5% Sep 08 Headline inflation 3.1% (largely due to recent increase in tobacco excise) Underlying inflation fallen 2.75% Awards were seen as the safety net of the industrial relations system providing either minimum standards for workers or the benchmarks which agreements were judged No downward flexibility for Wages Change from AIRC to AFPC Collective Agreements/ AWAs no longer pass no dis. Test. This removed the award as the system safety net. Removal of formal individual agreements (AWAs) BOOT test introduced for collective agreements 10 National Employment standards Modern awards (don’t apply to common law contracts >$113,800) Awards/Enterprise agreements flexibility arrangements allow individual flexibility Unfair dismissal laws reinstated, Good Faith Bargaining Conditions Minimum Wage increased 4.8% to $569.90 (N.B this is indexed to CPI) The overall combined effect of the changes is to place more focus on collective bargaining whilst reforming awards to make them a more flexible safety net, with NES forming the absolute minimum. Began in early 80s 1983 floating exchange rate Deregulated interest rates Currently focusing on anti-mergers, credit fees and charges and short selling Protection Reductions – Reforms in Manufacturing (1982/83) PMV 72% protected and TCF 220% protected average 25% all manufacturing. General reforms have been: General assistance at 5% by 2000 PMV/TCF to 5% Agriculture has declined from 11% to around 6% on average Trade Practices Act (74) Hilmer Report/ National Competition Policy (93) – Regulates Price fixing, boycotts, mergers/takeover(see ACCC). Commercialised through… Corporatisation – Aus Post Privatisation – CBA, QANTAS, Telstra (fail) Government outsourcing to private firms Increases to pension age Work for the Dole User Pays Principles e.g. HECS, <bulk billing Lowest in 08 at 3.9% (below structural levels) GFC saw it hit 5.8% Oct 09 Dropped back to 5.1% (Jun 2010) and 5.3% (Jul 2010 due to increased participation rates as total jobs increased) NAIRU is considered to sit at 4.75% BOGS surplus funded by commodity boom see TOT – +1.9% of GDP NFD increased from 32.1-51.7% of GDP (90-10) NFL grown from 42.3-58.7% of GDP (90-10) Most recently, a huge appreciation from 0.69-0.97 (Dec08-Sep10) TWI 49 at the beginning of century, now standing at around 73 Overall, real incomes have increased by 52% (average) between 94-08 Copenhagen summit saw minimal reduction in emission schemes. ||  ||
 * __ GWP __ **
 * __ G/S __ **
 * __ Capital flows __ **
 * __ Direct Investment __ **
 * __ Portfolio Investment __ **
 * __ Technology __ **
 * __ Distribution __ **
 * __ Main Sources of Growth (Current) __ **
 * __ GFC __ **
 * __ Australian Trends __ **
 * __ Trade: __ **
 * __ Productivity: __ ** Multifactor productivity averaged 1.1% pa over the past 5. Far below the 2.3% during the 90s
 * __ Growth: __ **** Australia managed 1.2% growth during GFC  **
 * __ Fiscal Policy: __ ** mildly contractionary 10-11 due to cyclical and discretionary factors
 * Large fiscal deficits ** of -4.2% (09/10) and -2.7% (10-11)
 * Real spending ** will be restrained to 2% pa till the budget returns to surplus 1% of GDP
 * New taxation ** reforms adopting // Henry Tax review // recommendations, inc.
 * Education ** – // Skills for sustainable growth // - $661m//, Education Revolution // - $5.9bn (08/09), projecting 39,000 new jobs.
 * Infrastructure ** - $5.6bn to // New Infrastructure Fund // and $1bn to // existing rail networks //, designed to boost productivity levels and relieve capacity constraints
 * Health ** - $7.3bn over next 5 years to // National Health and Hospital Network ( //GP super clinics, training nurses, increasing beds)
 * Environment ** - $652m to // Renewable Energy Fund // boosting the $5.1bn for // Clean Energy Fund //(08/09)
 * __ Monetary Policy: __ ** mildly expansionary
 * Cash Rate: ** Fell from 7.25% to 3% (Sep 08- May09)
 * CPI: ** Since 96 averaged 2.9%
 * __ Micro policy: __ **
 * __ Factor Markets (Lab/Cap) __ **
 * __ Labour Markets __ **
 * Workplace relations act 96 – **
 * WORK CHOICES! **
 * Current System – Fair Work Australia – FWA **
 * __ Capital Markets __ **
 * __ Product Markets __ **
 * __ Public Sector (General) __ **
 * Taxation Policy ** – Income tax cuts, GST (2000)(bad for equality), Fringe Benefits Tax, Capital Gains Tax (these help equality), other tax see budget
 * Social Welfare Policy- ** Move from income support policy to active employment policy’
 * __ Unemployment Rate: __ ** Peaked in 92/93 at 10.7%.
 * __ External: __ **
 * CAD: ** -5.8% of GDP (Mar 2010) During GFC fell to -1.7% (Jun 2010) lowest in 10y.
 * Exchange Rate Volatility: ** Historically high
 * __ Equality etc. __ **
 * Gini Coefficient: ** Trend is up – 0.310 (99/00) to 0.331 (07/08)
 * HDI ** 0.970 (2nd and regularly in the top 5)
 * __ Environment: __ ** Australia is one of the highest per capita CO2 per capita emitters.