ECONOMIC NOTIONS. Economics and Macroeconomics Macroeconomic environment -decissions of economic units: what, how, to whom, when -maximization: of utility,

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Presentation transcript:

ECONOMIC NOTIONS

Economics and Macroeconomics Macroeconomic environment -decissions of economic units: what, how, to whom, when -maximization: of utility, profits etc. -outcomes: inflation, unemployment, disequlibria -economic models Quantity=f(Prices, Incomes) -economic schools: neoliberalism, neokeynesianism GDP -components, -measurement problems, -comparisons among countries

Methods for establishing GDP Σ(R i -MS i ) = (W j + P j + R j ) =C + I + G + (E - IM) value added = incomes = final demand with: R i, Ms i – sales and material costs of productive unit i, W j, P j, R j – salaries, profits and rents of people engaged in production, C – personal consumption, I - investments, G – government consumption, E – exports and IM - imports

GDP Structures PRODUCTION INCOMES FINAL DEMAND Value added Salaries Private Consumption Industrial Sectors Dividends Gross Investments (A-F) Retained Profits Government Consumption Services Depreciation Exports (G-O) - Imports GDP factor prices + indirect taxes+ indirect taxes - subsidies- subsidies GDP market pricesGDP market prices GDP market prices - incomes - incomes GNP market pricesGNP market prices - capital depletion NNP market prices

Performance Indicators - Economic welfare and economic growth -Capacity utilization and unemployment -Stability and inflation -Equilibrium; internal and external -Income and wealth distribution -Other criteria Value judgements

Economic Indicators, 2005 GDP growth % Inflation yearly average Current account %GDP Budget balance %GDP Unempl. Rate FDI net inflows GDP per capita PPP* Czech R Estonia Hungary Latvia Lithuania Poland Slovakia Slovenia EU

Income Distribution

ECONOMIC EFFICIENCY AND SOCIAL COHESION

Basic Economic Questions WHAT- maximization of utility, product market, consumers, restrictions, planner HOW- maximization of profit, labor and capital market, producers, restrictions, planner TO WHOM- product and factors market, planner WHEN- capital market, planner

The Pillars of the Economic Systems Ownership Management State or socialPrivate Centralisedstate/ centralised Soviet Union private/ centralised South Korea Decentralisedsocial/ decentralised Yugoslavia private/ decentralised USA