“““““““““““““““`TO WATCH, A BIG NUMBER

Goverment’s finances will play a critical role in deciding the direction of the financial markets.

The new year, as expecdtd strted on a sombre note, Analyst airing their views on the television or editors writing on the edit pages, all sounded cautionus, referring to numerous macro ecronomic challenges that india might hav to face as the year progresses. The list of issues is fairly lengy, but the ones of most concern are slowing growth, high current account and fiscal deficit and, above all, the political logjam in Delhi, which is not allowing the government to move even an inch, quite literally, All this, coupled with ever rising uncertainty on the global front, has the capcity to trun option mism into skepticism.

Howeve, the single biggest indictor thtat will dominate the discussion and possibly determine the direction of the financial world in the next couple of months is fiscal deficit,The tone was set by the prime minister in his message to the nation on the eve of New Year, He said:’; I am concerned about fiscal stgaility in future because our fiscal deficit has wrsened in the past three years, ” the proble, howeve, is that once the genie(fiscal deficit) is out of the bottle, it’s alway difficult to put it back, Europe and United SState for example, is strugllling hard to do the same,IN INdia, the dificit trget set in the begininning of the year at 4.6 percent of the GDP is all set to be breached due to the higher expenditure on account of subsidiesa nd slower revenue growth during the year,

The range of estimates flowting in the market suggests that the numbet will settle betwwen 5.1 percent and 6.1 percent of the GDP.A higher number for the current year will automatically transalte into higher deficit expectation for the next fiscal.A higher deficit means a higher simply traslates into higher borrowing by the government, elbowingout the private sector from the debt market, Aso, besides denting confidence, high government expenditure, naturally not matched by production, results in inflationalry pressure, FUrthermore, higer governmetn spending also results in hisgher imports which puts pressure on the currency.

Understanding the need of fiscal pridence perhaps more then anyone elso, the PM righly reminded the nation in ths mesage, India has paid a heavy price in the pastfor fiscal deficit profligacy.

Many of us recall thev dark days of 1990-91 when wee had to go around the world for begging for aid.’ But the question is wil his government walk tthe talk on Budget day thd let the numbers d the talk or will we again slip ito ” the dark days of 1990-91….It will be difficult for the government to contain expenditure in the vgiven circunutate, but the iplementation of reforms, especially in taxation, such Goods and Services Tax and direct. Taxes code can undo the damage to an extent, containing deficit may not impossible but willl be an uphil task, especially with polictcal commit ments like food security.

Your money

the development in the euro zone, inflation and fiscal deficit wil be the key figurs to watch out for, while inflation is howing some signs of easinyany slip on the fiscal front will put extra pressure on the markets ande possibnle undo the benefit of any small cut in the interest rates by the RBI, As we go to press, the markets are waitng for the thierd quarter numbers, and tehr results are expected to do very little to lift the mood, From here on, all erys will be on the Union Budget and the merkets will expect the government to reiterate its commitment towards refpre, amd [resemt acceptable numbers on the fiscal front.

direct.

“““““““““““““““`TO WATCH, A BIG NUMBER

Goverment’s finances will play a critical role in deciding the direction of the financial markets.

The new year, as expecdtd strted on a sombre note, Analyst airing their views on the television or editors writing on the edit pages, all sounded cautionus, referring to numerous macro ecronomic challenges that india might hav to face as the year progresses. The list of issues is fairly lengy, but the ones of most concern are slowing growth, high current account and fiscal deficit and, above all, the political logjam in Delhi, which is not allowing the government to move even an inch, quite literally, All this, coupled with ever rising uncertainty on the global front, has the capcity to trun option mism into skepticism.

Howeve, the single biggest indictor thtat will dominate the discussion and possibly determine the direction of the financial world in the next couple of months is fiscal deficit,The tone was set by the prime minister in his message to the nation on the eve of New Year, He said:’; I am concerned about fiscal stgaility in future because our fiscal deficit has wrsened in the past three years, ” the proble, howeve, is that once the genie(fiscal deficit) is out of the bottle, it’s alway difficult to put it back, Europe and United SState for example, is strugllling hard to do the same,IN INdia, the dificit trget set in the begininning of the year at 4.6 percent of the GDP is all set to be breached due to the higher expenditure on account of subsidiesa nd slower revenue growth during the year,

The range of estimates flowting in the market suggests that the numbet will settle betwwen 5.1 percent and 6.1 percent of the GDP.A higher number for the current year will automatically transalte into higher deficit expectation for the next fiscal.A higher deficit means a higher simply traslates into higher borrowing by the government, elbowingout the private sector from the debt market, Aso, besides denting confidence, high government expenditure, naturally not matched by production, results in inflationalry pressure, FUrthermore, higer governmetn spending also results in hisgher imports which puts pressure on the currency.

Understanding the need of fiscal pridence perhaps more then anyone elso, the PM righly reminded the nation in ths mesage, India has paid a heavy price in the pastfor fiscal deficit profligacy.

Many of us recall thev dark days of 1990-91 when wee had to go around the world for begging for aid.’ But the question is wil his government walk tthe talk on Budget day thd let the numbers d the talk or will we again slip ito ” the dark days of 1990-91….It will be difficult for the government to contain expenditure in the vgiven circunutate, but the iplementation of reforms, especially in taxation, such Goods and Services Tax and direct. Taxes code can undo the damage to an extent, containing deficit may not impossible but willl be an uphil task, especially with polictcal commit ments like food security.

Your money

the development in the euro zone, inflation and fiscal deficit wil be the key figurs to watch out for, while inflation is howing some signs of easinyany slip on the fiscal front will put extra pressure on the markets ande possibnle undo the benefit of any small cut in the interest rates by the RBI, As we go to press, the markets are waitng for the thierd quarter numbers, and tehr results are expected to do very little to lift the mood, From here on, all erys will be on the Union Budget and the merkets will expect the government to reiterate its commitment towards refpre, amd [resemt acceptable numbers on the fiscal front.

direct.

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Global Conference Board forecast expects world gross domestic product to grow 3.2% in 2012 and accelerate to 3.5% from 2013 to 2016. In addition, we expect an average growth of 2.7% in 2017-2025. Each period of expected rate is lower than the average 3.6% over the period 1996-2005, before the recession.

Board of Directors prediction ‘was prepared to help its members business to fit the changing world economy. Dow Jones News wires and The Wall Street Journal was given exclusive access to the forecasts.

Much of the acceleration in the medium term will come from advanced economies, including the U.S., euro area and Japan. The Council projects that the growth of developed countries “will increase from 1.3% in 2012 to 2.0% over the next four years, then decline to 1.9% from 2017 to 2025.

Emerging economies, led by China and India are set to slow, with a total GDP seen rising 5.1% in 2012, 4.9% from 2013 to 2016 and 3.4% thereafter.

When economists board ran global forecasts, the biggest surprise was the return of the bottlenecks in the growth rates of China, said Bart van Ark, chief economist at the meeting.

China is expected to grow 8.7% next year, by 6.6% over the next four years, and only 3.5% in the period 2017-2025.

Image via Wikipedia
Of course, the rate of 3.5% is based on a much higher level of GDP. The Board expects that China will overtake the U.S. as the largest economy around 2015 on a purchasing power parity.

“China has become an export-oriented economy more oriented to domestic consumption based on the demand for,” said Van Ark This change, with a slower population growth, will account for most of a slowdown in China.

The slowdown in global output will result in smaller gains in per capita income, which poses risks to both worlds developed and developing countries, the report warns.

For the advanced economies “, slower income growth will be less money available to fund health care and retirement plans,” said van Ark

The United States and the euro area have already had to confront the unsustainable trends of taxing rights programs. Slower income growth would be even smaller sources of income.

Emerging markets, per capita income growth is likely to be uneven. Van Ark said that some countries could see the growth of per capita income of just 1%, interest rates too low to improve the standard of living.

Another recession could be about to arrive, or even be here already. Some people fear it will be as bad as the last one, which reduced output in the U.S., euro zone and Japan by 5.1, 5.5 and 8.9 percent respectively.

Those GDP declines are often described in cataclysmic terms: staggering,disastrous or traumatic. Such words are vast – and dangerous – exaggerations.

Even at the trough of the last recession in 2009, real GDP in most rich countries was as high as it had been five or six years earlier – when economic conditions were not considered particularly bad.

And that comparison is too harsh on the 2009 consumer experience, which included iPhones and the Airbus A380 super jumbo jets, both better than the comparably valued goods available in 2003.

Americans and Europeans have little enough reason to moan about their recessions; citizens of the world have much less. For mankind as a whole, the small travails of the wealthy are much less important than the entry of the truly poor into the modern economy.

Industrial production in emerging economies, a good measure of that development, has increased at a heartening 6 percent annual rate over the last decade, according to the most recent data from Dutch consultants CPB. The recession reversed two years’ progress, but only briefly.

Of course, production is only one part of the economy. The recession has been harder on other parts. It led to both increased unemployment and a decline in the relative position of the poor, especially in the U.S.

Neither of those bad trends has been fully reversed. But the former was caused mostly by the end of an unsustainable excess of construction activity while the latter only amplified a decades’ old pattern.

Then a series of crises, including a 25 percent reduction in U.S. GDP, helped lead the world into the most destructive war in history. The desire not to repeat the inter-War experience spurred on the potent official response to the 2008 financial crisis.

That response basically worked, but the scary headlines and wild assertions continue, as if fascist governments were once again coming into power and hungry mobs were breaking into food stores. In fact, the few rioters have had less noble objectives: the defense of unaffordable pensions in Greece and the acquisition of branded consumer goods in the UK.

What causes the wide gap between perception and reality? I have two suggestions.

First, too many people look at the economic world largely through financial glasses. The recession made only a slight dent in industrial prosperity but the financial crisis which preceded it really was cataclysmic.

Several major institutions almost failed, central banks lent and governments borrowed as never before, and the cult of free financial markets was discredited.

And unlike the economy, the financial system has not really recovered. If anything, the crisis has broadened – from banks to governments.

Still, financial insecurity cannot really explain the prevalence of tragic rhetoric. The fear and trembling reflects a more profound error – a mistaken understanding of the economic good. Many people judge economic success only by the pace of expansion.

For them, it is not enough to have adequate or even abundant quantities of necessities, comforts and luxuries. They say that an economy is only good if it consistently provides more of all these things, and that the faster the pace of increase, the better the economy.

That approach to life has bad consequences, even ignoring the limited satisfaction provided by material things. For individuals, it is a recipe for discontent.

Those who always covet more wealth will inevitably spend much of their life feeling that they do not have enough, with or without recessions.

The irrational craving for GDP growth also distorts economic policy. It makes small, temporary and otherwise trivial setbacks in consumption – a few less days of holiday or a few more months with the old car – look like, yes, staggering disasters.

It is right for policymakers to respond strongly to genuine or possible disasters. But when economic times are good, financial conditions should be something like normal.

That is not happening right now. Despite three years of stability in rich countries and strong growth in poor ones, monetary and fiscal conditions remain extreme and policymakers, worried about another recession, are reluctant to make big changes.

The combination of financial extremism and fear of any decline in GDP could lead to a truly painful decline in output, if the already weakened global financial system becomes totally dysfunctional.

The irony would be painful. The foolish desire for constant and fast economic growth would have made those scary headlines – otherwise completely unmerited – come true.

As reported on Monday the Greek Ministry of Finance, the budget will be discussed in the next few days on the Standing Committee on Finance and latervoted by the plenary at the end of the month.

The budget envisages further austerity measures for the years 2011 and 2012 of7110 million euros, of which about 2,110 million will be raised in the remainder of the year.

The budget gap this year is about 4,300 million euros, equivalent to 2% of GDP.

The unemployment rate is expected to reach 15.2% in 2011 and is shooting16.4% in 2012, while inflation is expected to be within the 3% this year, and 2% next.

“The big problem Greece’s budget has been crossed with the profound and multiple crises in the euro area and the lack of effective and adequate institutions of global economic governance,” says the document released today in Parliament.

The text adds that ”Greece has claimed about 65,000 million in the first rescue of 110,000 million euros.”

According to projections issued on 20 September by the International MonetaryFund (IMF), Greece’s public debt could even go up to 189.1% of GDP next year.

This follows from the draft budget submitted to Parliament, which provide an economic contraction of 5.5% of Gross Domestic Product (GDP) this year and 2.5% next year.

In parallel, the executive calculates a debt in 2012 of 172.7% of GDP, with a volume of 381,200 million euros, about 17,000 million more than this year.

These data are the counterpoint and the consequence of the severe measures promoted by Athens to reduce the deficit, which rose from 15.6% in 2009 to 8.5% this year.

deficit

To achieve the goal of lowering the deficit to 6.8% in 2012 will need to raise an additional € 7110. The Greek Council of Ministers admitted yesterday that the holein the budget for this year is about 4,300 million euros, representing 2% of GDP.

The additional funds must come from increased taxes and cut state spending until the end of 2012.

Meanwhile, the unemployment rate will reach 15.2% this year, with more than 800,000 workers unemployed, and shot up to 16.4% in 2012.

The Confederation of Public Servants ADEDY ensures that employees have already lost 40% of its purchasing power by the crisis, which will add yet anotherloss of between 20 and 40% with the new measures the Government intends toimpose.

In protest, along with the Confederation of GSEE private sector workers, has announced a new 24-hour general strike for next Wednesday and again on 19October.

Government measures include the elimination of bonuses for staff and obligation to pay taxes from income of 5,000 euros per year instead of the current 12,000 euros.

Those from Business Insider did a top economic predictions for 2030, considering the evolution of a barrel of oil and GDP and the number of inhabitants.

The population will include 8.8 billion people, compared to 6.8 billion in 2010. Meanwhile, the number of people in the U.S. will reach 365 million people, up from 307 million last year.

And the price of a barrel of oil will rise a staggering pace. So, in 2030, will cost $ 308 a barrel, compared to an average price of 35% in 2000.

Checkout the U.S. healthcare system will increase by 88% to 9 trillion dollars a year over the next 10 years. And the number of elderly people in the U.S. will advance – from 54 million to 40 million last year. Surprise, but the number of people in prison in America will grow at a faster pace than the population here. In 2030, 9.4 million people will be closed up 14% from 9% growth rate in the U.S. population. In the U.S., Gross Domestic Product (GDP) will reach 30, 9 trillion dollars from 14 trillion in 2010. Meanwhile, China’s GDP will be 40 trillion, compared to 10 trillion last year. In addition, because America will reach 32 trillion dollars. ’s population consumes 31% more energy and carbon dioxide emissions will amount to 50.678 million tonnes.

Image via Wikipedia

Economic growth in France stagnated in the second quarter, raising pressure on the government to cut spending and abolish tax breaks to convince financial markets that meet its debt reduction goals.

The French statistics office said gross domestic product growth (GDP) was 0 percent in the period from April to June against the growth in the first quarter of 0.9 percent, the best in nearly five years.

The main cause was a fall in household consumption, which declined 0.7 percent from the first quarter, a particularly worrying sign for an economy that, unlike Germany, it depends on the force of domestic demand.
Economists polled by Reuters had given an average forecast of a rise of 0.3 percent.

After the European Central Bank took action this week to defend the bonds from Italy and Spain, the fire was concentrated markets in France amid rumors about the health of their banks and the soundness of its AAA rating.

A stagnant economy does not help the situation.

Finance Minister of France, Francois Baroin, downplayed the quarterly data, arguing that it was no surprise after the strong start of the year.

He said the Government will not revise downward their forecasts for growth and meet its goals of cutting debt, after President Nicolas Sarkozy on Wednesday ordered his ministers to find new ways to lower the deficit.

The debt reduction plan is based on a GDP growth of 2 percent in 2011 to 2.25 percent in 2012 and 2.5 percent on average in both 2013 and 2014.

A recent IMF report offered a less optimistic, forecasting growth of 2.1 percent for 2011 from 1.9 percent in 2012 and 2 percent by 2013.

France, Italy, Spain and Belgium set the ban on short selling of financial stocks on Thursday night in a coordinated attempt to restore confidence in markets hit by rumors and higher costs of credit.

Economic recession, what is that and why is it bad ( and why is it really not bad)?

Recession is when the GDP (gross domestic product) of a country does not grow over two quarters ( half a year, economists and such use quarters). And what is bad about that? Well it damn should be growing! If the total output of your country is growing that must mean you are in the same place you were before, but your not. Your population has risen. so there is less per person. But now we can see we are out of recession, most countries GDPs grew last quarter. So we are out of that shit, we are growing again, the media then starts spouting stuff about the growth being less than expected. Well anyone can expect growth, if I expect the GDP of the USA to grow by 0.1% next quarter then a) I would be an idiot b) I could publish an article saying growth was at 70 times the expected rate! You can do that trick.

Unemployment.

We can admit that a lot of people are unemployed, but then again we are not in our society lacking in products are we? There is unemployment because the jobs are full. There are excess people. We have excess because we have been doing so well we can support that. And an inevitable fact of an economy growing is unemployment. Competition lowers prices and therefore is a good thing? With that comes some companies getting bigger, some get smaller. You know how it works and so do I. This creates it, so do companies shutting down. And some people a) cannot work or b) cannot be bothered to work. 

Poverty..

Now we can admit to knowing there is a lot of people who are poorer than the rest of us. Wait a minute? That’s what we call relative poverty. Some people are relatively poor just like a 1.2million pound house is a shit hole in comparison to a 20million pound house. So shut your shit. But then there is the matter of…..

Destitution.

This is where people are..

‘ Absolute poverty or destitution refers to being unable to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live in absolute poverty today.’

Thanks Wikipedia. Yeah so we can see that’s a bad thing. And Wikipedia isn’t known for being wrong ( it is statistically more accurate than Encyclopedia Britannica). So thats 1.7billion. Or roughly 2/7 of the people on this planet. So if you lined up 7 people 2 of them would be like that, with no acsesss to these things. Mostly this is in africa and such, south america and india. But this leads on to my point….

Geography/History lesson for you….

Look back to England in the 1800s, it looked a lot like that for a lot of people, then it got better, it revolutionised. Then it spread to europe. Then across to america. By the 1900s everything looks a lot better. Then by 1950 those places were awesome, yay! This 150 period of revolution started here first, we can see it in action in africa. We have seen a massive part of it this year, people gaining democracy ( some) in the Arab Spring. China and India and Brazil are booming economys and conditions there are getting a whole lot better. They are where England and the USA were around 70-80 years ago. So even though things are shit for 2/7 people now we can be safe in the knowledge that this is the best it has been for everyone everywhere ever and it will get better for all of us. So the next time you read about starvation in africa think about the fact that the country your are in now was very much like that not so long a go..

Time since our living conditions were like that= 150-250 years ago.

Time since we started improving rapidly= 4000 years ago

Time we have been around as a species= 250,000 years

Time the universe has been here= 14,000,000,000 years (aprox)

Thanks for reading:)

In the short-term Solow accepted that the existing productivity rates of each country would be different and national economies were actually at different stages of development as well as varying levels of productivity. Every national economy has its own strengths and its own weaknesses that are capable of influencing GDP per capital growth rates.2 Solow acknowledged that the strengths and the weaknesses of national economies would alter over time. In fact the Solow model of Economic Growth assumed that the most advanced national economies like those of the United States, Western, Europe, and Japan would eventually experience declining GDP per capital economic growth rates as much due to diminishing returns as competition from other countries.3

As the underdeveloped and the developing countries introduced the necessary capital inputs or labour inputs that would allow for greater economic productivity, and therefore lead to higher levels of GDP per capital economic growth rates. In that sense the Solow model of Economic Growth does predict that the GDP per capital economic growth rates in developed and the developing economies will eventually be the same in the long-term.4

The Solow model of Economic Growth predicted that underdeveloped and developing national economies would inevitably catch up with the most advanced capitalist countries. The developing countries, or at least the most successful of them were able to catch up with the most advanced capitalist economies because the most advanced countries suffered relative decline after 1973. The economic slow down in the most advanced capitalist economies allowed more developing countries to catch up with them, whilst the unwise borrowing by the governments of the developing countries would undermine future GDP per capital growth rates due to the subsequent debt crisis.5 The Communist economies of the Soviet Union and the state of Central and Eastern Europe were not able to catch up with the performance of the most advanced capitalist economies, and indeed their economic performance stagnated badly from the early 1970s.6

The empirical evidence concerning the validity of the Solow model of Economic Growth in GDP per capital terms is mixed. Some empirical evidence supports the validity of the prediction of the Solow model of Economic Growth that the least developed countries will catch up in the long-term, whilst other evidence does not support the prediction made by the model. Some of the least economically developed countries when the prediction of the Solow model of Economic Growth was put forward have now matched or are close to matching the GDP per capital economic growth rates of the most advanced capitalist countries. The now developed countries that have done so well to catch up with the GDP per capital economic growth levels of the most advanced economies have included South Korea, Hong Kong, Singapore, and China.7

The economic development of China has been even more remarkable as attempts to achieve capitalist economic policies did not take place until the late 1970s (despite retaining a Communist political regime). These countries have managed to achieve high economic growth rates so that their GDP per capital growth levels not to mention the standards of living are substantially above their starting levels of the 1950s, and the 1960s. Conversely the economic growth rates of the most advanced capitalist countries have generally slowed down since the 1960s. The most advanced capitalist economies unintentionally allowed the main developing countries catch up with them as their lead in modern technology increased.8

There have been other countries that have validated the claims that the Solow model of Economic Growth in relation to the GDP economic growth levels becoming the same over the long-term. For instance, the former communist states of Central and Eastern Europe, which moved towards capitalism as well as liberal democracy. These former communist countries have now made enough economic progress to become member states of the European Union between 2004 and 2007.9 The former communist states of central and eastern Europe were only able to compete their transitions to capitalist economies with financial assistance as well as hard hitting restructuring programmes that shut down the old inefficient factories of the centrally planned communist economies. The collapse of communism may have presented Central and Eastern European countries with improved long-term economic opportunities yet it undermined the developing countries that had been assisted by the Soviet Union, Angola, Cuba, and Mozambique for example.10

Other empirical evidence does not support the prediction made by the Solow model of economic growth that the GDP per capital level of the less developed countries will grow at the same rate in the long-term.11 Some of the underdeveloped and developing countries since the 1970s have actually fallen further behind the most advanced capitalist countries rather than catching them up in terms of GDP per capital levels in the long-term. The poorest and economically least developed countries especially those in Africa, Burma and North Korea have suffered severe economic regression rather than progression.12

The Solow model of economic growth did certainly not predict the further economic decline of countries like Eritrea, the Sudan, and Zimbabwe. The less developed countries with economies that have declined sharply have been severely affected by the debt crisis, gross economic mismanagement, environmental degradation and technological backwardness. The Solow model of economic growth would not be able to use any of those factors in predicting the productivity or growth rates of the poorest countries. When the Solow model of economic growth was developed it was assumed that national governments would make rationally based decisions on economic policies, which has obviously not happened in countries like Eritrea and the Sudan.13

It could be argued that the Solow model of economic growth has been unable to accurately predict whether or not the GDP per capital levels of all countries would be the same in the long-term is not going to happen. It will not happen simply because some of the least developed countries are so far behind the rest of the other countries that they never catch up.14 These countries will arguably face ever harsher and less favourable economic conditions that will make it harder to stay still let alone make any kind of progress. Of course the ability or inability of national governments to effectively manage economic policies that will actually allow for their respective countries to implement sound economic policies cannot be programmed into Solow model of economic growth to predict what will happen.15

To conclude the empirical evidence in relation to the prediction of the Solow model of economic growth that the GDP per capital growth of all countries will become the same eventually in the long-term is not overwhelmingly conclusive. Some underdeveloped and developing countries have in the past managed to increase their GDP per capital economic growth rates to match the performance of the most advanced capitalist countries like the United States and Japan. Some countries like South Korea, China, and the former communist states of Central and Eastern Europe have to a large extent caught up with the most advanced capitalist countries. On the other hand some of the world’s poorest and economically least developed countries have got poorer in relation to the richest countries, they have regressed instead of catching up.

Bibliography

Abramovitz A., (1986), “Catching Up, Forging Ahead, and Falling Behind”, Journal of Economic History, 46, 2, 385-406. http://links.jstor.org/sici?sici=0022-0507%28198606%2946%3A2%3C385%3ACUFAAF%3E2.0.CO%3B2-G

Bannock G, Baxter R, & Davis E, (2003) Penguin Dictionary of Economics, 7th edition, Penguin, London

Baumol W.J., (1986), “Productivity Growth, Convergence, and Welfare: What the Long-Run Data Show”, American Economic Review, 76, 5, 1072-1085. http://links.jstor.org/sici?sici=0002-8282%28198612%2976%3A5%3C1072%3APGCAWW%3E2.0.CO%3B2-B

Bromley, Mackintosh, Brown, and Wuyts (2004) – Making the International: Economic Interdependence and Political Order, Pluto Press, London

De Long J.B., (1988), “Productivity Growth, Convergence, and Welfare: Comment”, American Economic Review, 78, 5, 1138-1154. http://links.jstor.org/sici?sici=0002-8282%28198812%2978%3A5%3C1138%3APGCAWC%3E2.0.CO%3B2-V

Ison S, (2000) Economics, 3rd edition, Prentice Hall, London

Mulhearn C, & Vane H, (1999) MacMillan Foundations – Economics, MacMillan, Basingstoke

Smith D, (2003) Free Lunch –Easily Digestible Economics, Served on a plate, Profile Books, London

1 Bannock, Baxter, & Davis, 2003 p. 360

2 Smith, 2003 p. 110

3 Bannock, Baxter, & Davis, 2003 p. 360

4 Bromley, Mackintosh, Brown, and Wuyts, 2004 p. 14

5 Baumol, 1986 p. 1071

6 De Long ,1988, p. 1139

7 De Long,1988), p.1138

8 Abramovitz,1986, p. 385

9 Mulhearn C, & Vane H, 1999 p. 193

10 Ison, 2000 p. 260

11 Bromley, Mackintosh, Brown, and Wuyts, 2004 p. 14

12 Bannock, Baxter, & Davis, 2003 p. 90

13 Mulhearn C, & Vane H, 1999 p. 193

14 Smith, 2003 p. 110

15 Bromley, Mackintosh, Brown, and Wuyts, 2004 p. 14

Some have reformed the way the money from the budget while others have forgotten how to increase revenue. Decisions about spending chibzuirea are even more important with each generally they tend to increase. On average, in 1961 

building programs focusFoto: Hotnews

governments spent about 30% of GDP. Now the percentage is 45%.

As is the effectiveness of these measures but also depended on another indicator. The reliability of the population in government intentions. In Europe, the highest level of confidence in the ability to reform it is Luxembourg. Governors there when I say that one then and do. The opposite is Estonia, Hungary and Japan.

To avoid large deviations have to spend. The downside is that your income is shrinking and there’s where the money out. When economies Dudu, structural deficits were forgotten. Suddenly, they devienit the cruel and evil master. The average budget deficit in OECD countries was 5.6% in 2010 to 1.3% in 2007. Public debt in 2010 was on average (all in the OECD) of 74.2% of GDP, compared to 55.6% in 2007.

 For some countries, high levels of debt have led to fiscal solvency problems, manifested by large increases in interest rates on sovereign bonds and the declassification of the rating agencies. Normally, higher interest rates put pressure on economic growth and increase the vulnerability of public finances.

debtFoto: Hotnews

Contrary to what some believe, the depth of fiscal consolidation does not depend on the size or the size of governments, OECD study shows. For example, Belgium (where government spending totaled 54.2% of GDP in 2009) and New Zealand (where government spending totaled 41.9% of GDP in 2008) showed similar fiscal consolidation needs.

Also, empirical research suggests that spending cuts, including reductions in wages and the government apparatus of social transfers are more effective than attempts to increase revenues. Therefore, for most countries, consolidation has been accompanied by cuts rather than revenue reform.

I gave Romania the data not to jump or the pro or the anti-government.

expenses and revenuesFoto: Hotnews

Data source is the study of OECD Government at a Glance 2011, which you can attach it’s not money, but I gleaned enough to make you curious.