Subsidies
China subsidising solar panel production
Australian Government in 2014 subsidised the mining and exploration of coal by energy companies by $4 billion AUD.
China: to produce technologically advanced products and undercut foreign manufacturers has quadrupl
Price Ceiling (max price)
U.S. 1970 petrol max price
Vietnam's price ceiling on milk products, United States' price ceiling on rents.
New York price ceiling on rent for housing and apartments.
Negative Consumption Externality
Cars in London vs Congestion Charge
Consumption of alcohols in South Korea (ie. many car accidents leading to deaths, injuries - making loud noises at late night). Smoking
Negative Production Externality
Thames polluted = Property Rights granted to Thames Water Coase Theorem
Taxing Negative Externalities
Pigouvian/Fat/Carbon Tax
BC - $30 per tonne of CO2
The Carbon Tax implemented by the Gillard Government in Australia in 2012. but later abolished
Limitation of Carbon Tax
Harms Economic Growth (US and China refuse)
Cap & Trade Policy
UN Kyoto Protocol 2000 (150 countries, US didn't ratify)
Reasons for trade
Different Factor Endowments: China imports minerals, natural resources, metals, and energy resources from Australia.
Increased Welfare - specialization and trade allow countries to gain a higher level of consumption than they would do domestically and thi
Quota
Eu quota on 20% imported Japanese cars
Fixed Exchange Rate
North Korea has a fixed exchange rate. However, the fixed exchange rate does not accurately reflect the market value of the currency as the market value for the currency is often 20 times lower than the fixed value for the currency.
Managed Floating Rate
China is implementing dirty float system for the exchange rate. It sets the maximum value to the exchange rate in order to artificially depreciate its currency and therefore export more to the world.
Contractionary Monetary Policy
Chile became the third Andean nation in just over a month to raise interest rates as a slump in local currencies pushed up inflation across the region. The central bank indicated further increases will follow.
2015 - October
Australia's Unemployment
Australia's jobless rate remained steady at 6.2 per cent in September, despite a small decrease in the actual number of people employed, according to the Australian Bureau of Statistics.
The ABS said on Thursday the decrease of 5100 in the labour force wa
Aggregate Demand - Housing
It seems like only yesterday that the biggest threat to the Australian economy was slowing growth in China, by far our largest trading partner, and the related decline in mining-related investment and commodity prices.
However, record low interest rates h
Aggregate Demand - Westpac
IN a shock move, Westpac today said it was raising its variable mortgage rates next month by 0.2 percentage points to 5.68 per cent.
Aggregate Demand - Chinese consumers
WHILE global financial markets are in turmoil as investors continue to fret about China's apparent economic slowdown, consumers in the country are increasingly upbeat.
China's faltering industrial profitability and output have caused financial market anxi
Monetary Policy - US
THE US Federal Reserve has opted to keep rates on hold at the end of its eagerly awaited September meeting.
Low inflation its major concern.
"Inflation is anticipated to remain near its recent low level in the near term" central bankers said in a statemen
China's GDP
The collapse in equity trading activity will also have produced a sizeable drag in financial-sector output growth last month.
"But the desire to keep growth close to the annual 'about 7 per cent' target means that growth probably won't be shown to have s
Unemployment/Trade Agreements - Australia's Car Industry
- Australia's 90-year history of assembling and building automobiles is coming to an end.
- Now a debate is raging about whether the government should once again stretch its financial assistance - which has already run to billions of dollars in the past t
Australian Exports - Beef
Beef is being hailed as the new iron ore, as Indonesia and the rapidly expanding Chinese market drive up demand for our cattle.
And that demand � coupled with favourable grazing conditions � is turning Top End livestock stations into multi-million dollar
Australia's Exports - Wine
Australia's wine exports have grown at their fastest rate since late 2007 as the twin forces of a falling Australian dollar and growing demand from China bring more optimism to the $4 billion wine industry.
Export sales to China in the 12 months ended Sep
Ways to increase employment - SA
AS SOUTH Australia's economy continues to struggle, business leaders are urging the government to act in order to provide a much needed jump-start to the state's jobs sector.
Organisations urging the government to sell off SA Water in order to avoid a "ma
R&D in Singapore/Sustainability/Improvements in the standards of living
Singapore's research & development (R&D) efforts have paid off with startups more than doubling in the last decade from 24,000 in 2005 to 55,000 last year.
Among other R&D efforts, Mr Lee (PM) added that the Agency for Science, Technology and Research (A*
The consequences of weakening the Singapore dollar
Double edge sword, positive effects may occur, but negative consequences loom large.
1. Singapore's exports become cheaper, which can serve to boost demand
2. But Singapore's imports simultaneously become more expensive, which means higher prices for impo
Malaysia's Economy
Malaysia's ringgit fell to a one-week low on Monday (Oct 19) ahead of Friday's budget as investors focus on what measures the government will take to shore up the economy amid a collapse in commodities and slowing global growth.
"The expectations are a bi
Japan's Economy
Japan's economy was expected to continue recovering moderately even though the slowdown in emerging markets was weighing on exports and output.
The BOJ has kept monetary policy steady since expanding its massive stimulus programme in October last year. Wi
The consequences of hangovers
In Australia, hangovers are causing 11.5 million "sick days" a year at a cost of $3 billion to the Australian economy, recent research suggests.
The American cost estimate includes spending on health care as well as the economic toll of lost productivity,
Britain and China's relationship - trade
This friendship is a visionary and strategic choice that fully meets Britain's own long-term interest.
The Chinese economy is slowing down and it is changing its nature from an investment-driven growth economy to an economy that has to look to invest in o
British steel left weak by China
About half of the 1.6bn tonnes of steel made globally comes from China: firms operating in the UK just cannot compete
In the past 18 months, China has flooded the market with cheap, subsidised steel as its economic growth has slowed. Beijing wants to grab
Is the UK marginalised in the EU?
One key issue in the debate about whether the UK should remain in or leave the EU is how far the UK is currently marginalised in Europe. As Nigel Lawson put it in the Times in May 2013: "While never 'at the heart of Europe' ... we are now becoming increas
When Gas Becomes Cheaper, Americans Buy More Expensive Gas
When gas prices fall, Americans reliably do two things that don't make much sense.
They spend more of the windfall on gasoline than they would if the money came from somewhere else.
And they don't just buy more gasoline. They switch from regular gas to hi
Energy Drinks Are Popular, but Not Enough to Replace Soda
America's affection for regular soda, as I reported this month, is waning.
It's true that as Americans come to crave more beverage variety, new types of drinks are becoming more popular. Those growing categories include some with a lot of sugar, like ener
Few in Venezuela Want Bol�vars, but No One Can Spare a Dime
Pity the bol�var, Venezuela's currency, named after its independence hero, Sim�n Bol�var. Even some thieves do not want it anymore.
The eagerness to dump bol�vars or avoid them completely shows the extent to which Venezuelans have lost faith in their econ
What Could Raising Taxes on the 1% Do? Surprising Amounts
Right now, the wealthy pay too little," Hillary Rodham Clinton said at this week's Democratic debate in Las Vegas, "and the middle class pays too much."
Raising their total tax burden to, say, 40 percent would generate about $157 billion in revenue the f
Asian exporters
Asian exporters starting to benefit from US Christmas shopping demand, helped by iPhone.
It's never too early to start your Christmas shopping, and Asian nations are starting to benefit. Exports from the region are recovering as demand from the US and oth
Asian economies leading to a recession?
As China weakens, recession stalks North Asia.
As China undergoes a painful rebalancing of an economy that accounts for 16 percent of global GDP - it has experiences its weakest growth rate since the global financial crisis.
Without a doubt, as long as Ch
Australia's CPI and wage growth
Wage growth is higher that CPI (note that CPI is low)
Why is Australia's CPI low?
Today's inflation numbers were so low, they took the market by surprise.
They've also put more pressure on the Reserve Bank to cut interest rates when it meets next week on Melbourne Cup Day.
Wages are weak, so most domestic costs are subdued, and there's
Economic Growth
Australia's GDP has expanded by 3.1% in the 2nd quarter of 2014 compared to the same quarter in 2013
New Zealand: 0.9% growth in GDP
Tariffs
US raising tarffs on Chinese solar panels
Negative Externality of Consumption
Smoking in Australia around children = second hand smoke = health issues = taxing on government provided health care / driving a car = pollution
Low Interest Rates
Japan = 0% (example of Zero Interest Rate Policy)
Progressive Tax Rates
Australia = ~49% for top income earners
Floating Exchange Rate
1GBP = 1.84AUD (October, 2014)
Centrally Planned Economy
Communism = Russia up until 1991
Monopoly (competitive branding)
Space research (within countries) = NASA in the US
Australia post, possibly Bunnings
Kellogg cereals (great variety)
astro TV
Oligopoly (more desirable)
Music companies = Four music companies control 80% of the US market - Universal Music Group, Sony Music Entertainment, Warner Music Group and EMI Group
Computer makers (Apple, Microsoft) OPEC
Coles and Woolworths
Healthcare systems
Limitations of Carbon Tax
Harms economic growth (US and China refuse)
Perfect Competition
Fruit and vegetables
Cabbages, Carrots
Monopolistic Competition
Mechanics, books, restaurants, food court
Persuasion to Limit Negative Externalities
Provide cheap public transport (Queensland recently decreased public transport fares by 5%)
GDP
Australia = 1.561 trillion USD (2013)
Deflation
Sweden = prices fell by 0.4pc in March 2014
Inflation
Zimbabwe = annual inflation rose in May 2008 to 1,063,572 per cent
Free Trade Agreements
Australia signed a FTA with Korea in April 2014
Protectionist Policies
Russia recently raised duties on second-hand car imports to protect their domestic industry
Legal barriers to entry
Ownership to key resources = Alcoa in 1930's, aluminium production
Cyclical unemployment
The Great Depression of the 1930's, the unemployment rate surged as high as 25%.
Positive Production Externality
Research and development- developing new technologies that benefit society or can be used by society.
Advertizing/Persuasion to limit Negative Externalities
Switching to public transport, less smoking, changing to greener companies
Low interest rates
Japan (0% - 2016)
Unemployment rate
Hovering around 5-6% in Australia 2016
Hovering around 8% in UK 2011
Expansionary Fiscal Policy
Failure of expansionary fiscal policy in Greece.
However, it may not always achieve its intended effect. For example, consider the situation of Greece. Any reduction in tax would probably not lead to increased consumer spending, as people would be more in
VERs (Voluntary export restraint)
Following the end of the FMA, EU and US asked China to restrict its textile exports.
Expansionary fiscal policy
In Greece, because the country runs such a large budget deficit, it cannot afford to prioritise on boosting AD because the cost of further increasing their budget deficit is too high. Therefore, they are going against expansionary fiscal policy ( therefor
Privatizations (making government businesses private)
Telstra, Qantas, Commonwealth bank, Public Transport
Nationalisations (making private businesses government owned)
1946- The Bank of England was nationalised.
Stagflation (increase in inflation and increase in unemployment simultaneously)
1973- US oil crisis. The 1973 oil crisis began in October 1973 when the members of the Organization of Arab Petroleum Exporting Countries proclaimed an oil embargo (ban on trade). By the end of the embargo in March 1974, the price of oil had risen from US
Indirect Tax
GST, Excise, VAT, Luxury, Customs Duty
Social Welfare
Australia: Centrelink
Negative Externality
South Africa: Electricity
Positive Externality
Singapore: Increased Accessibility to Education
Abuse of Monopoly Power
UK: car firms entering into selective and exclusive distribution networks to keep prices high
GDP
Russia: $14 611.7 billion USD
GDP per Capita
Nepal: $694.10 billion USD
Low UE
Malaysia: 3.4%
High UE
Greece: 23.40%
Low and Stable Rate of Inflation
Belgium: 2.2%
High Inflation
Brazil: 9%
Stagflation
Worldwide: GFC
Inequity of DOI
Chile: 0.5
Expansionary FP
America: American Recovery and Reinvestment Act 2009
Contractionary FP
Germany: Debt Brake 2009
Price floor (Minimum Price)
- India min wage ---- 118 rupees per day
Australian min wage - $17.70 per hour
Minimum wage laws in Australia = $16.87 an hour
Minimum Wage laws in the UK
France: domestic carbon price floor
Positive Consumption Externality
Eg. Vaccinations (NHS subsidised prescriptions)/ Hybrid cars/ Educations
Limitation of switching to biofuel
Conflict with food (Brazil uses 25% ethanol in gasoline)
VERs
Following the end of the FMA, EU and US asked China to restrict its textile exports.
Exchange rates
1.5 dollars - 1 pound
1 AUD= approx 0.7 USD
6.3 Chinese Yuan to the dollar
Current Account Deficit
UK 2011 1.9% - Aiming to be in surplus by 2013
Australia has a current account deficit of $15,535 million AUD
Structural unemployment
The manufacturing industry, for example, has been in significant decline in the United States over the last few decades. The rise of the service economy, and then the information economy, has been filling the vacuum. However, the skills needed in manufact
Expansionary fiscal policy - which govts go against it and implement austerity measures: GREECE
Because the country runs such a large budget deficit, it cannot afford to prioritise on boosting AD because the cost of further increasing their budget deficit is too high. Therefore, they are going against expanisonary fiscal policy (increasing tax, decr