Taiwan and the Global Economy – Where We Stand July 2016
Some Basic Reminders (1) There is simply too much information to understand the world around us (2) Economic theory can be useful, but is incomplete - intuition is almost always wrong (3) The structure of the economy is always changing and this is because of competition (4) We can only model the data, since that is all we have; but data are very imperfect (5) Don't think about economics exclusively by yourself, it is easy to become confused
Major Themes or Empirical Conclusions (Stylized Facts) about the World Economy 1. Slow and/or Erratic Rates of Economic Growth 2. Declining Rates of Inflation and Even Deflation 3. Relatively High Asset Valuations 4. Extremely Low Interest Rates 5. High Debt/GDP Ratios 6. Low Rates of Productivity and Wage Growth 7. Slow Population Growth and General Aging of the Population 8. Low or Declining Rates of Labor Force Participation 9. Low Energy and Commodity Prices 10. Declining Velocities of Money
Let's Simplify and Break the World into Four Parts - The US, Euro Area 19, Japan, and China These four areas together constituted nearly 50% of World GDP in 2016(IMF) China(17%) US(16%) Euro Area (12%) and Japan (4%) Roughly 20 countries (out of 190) make up 78% of the world economy The calculations are made using PPP or GK international dollars
Percent of Total World GDP Rank Country Percent of Total World GDP 1 China 18.4 2 United States 16.3 3 India 7.6 4 Japan 4.3 5 Germany 3.5 6 Russia 3.2 7 Brazil 2.7 8 Indonesia 9 United Kingdom 2.4 10 France 11 Mexico 12 Italy 1.9 13 South Korea 1.6 14 Saudi Arabia 1.5 15 Turkey 16 Canada 1.4 17 Spain 18 Iran 1.3 19 Australia 20 Thailand
(34%) (10%) (23%) (9%)
Recent Developments in the US Economy (1) Real Economic Growth and Productivity (2) Unemployment and Labor Market Conditions (3) Inflation and Asset Prices (4) Trade and Manufacturing
Summary of the US Economy to March 2016 US Real Economic Growth and Productivity Growth
(2) US Unemployment and Labor Market Conditions
(3) Inflation and Asset Prices Shiller CAPE
(4)-a US Trade and Manufacturing
(4)-b US Trade and Manufacturing (continued)
Recent Developments in the EA-19 Economy (1) Real Economic Growth and Productivity (2) Unemployment and Labor Market Conditions (3) Inflation and Asset Prices (4) Trade and Manufacturing
Summary of the EA-19 Economy March 2016 (1) EA Real Economic Growth and Productivity
(2) EA -19 Unemployment and Labor Market Conditions
(3) EA Inflation and Asset Prices
(4) EA Trade and Manufacturing
(4) EA Trade and Manufacturing (continued)