1. Taiwan and the Global Economy – Where We Stand
July 2016

2. 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

3. 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

4. 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

5. 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

6. (34%)
(10%)
(23%)
(9%)

10. 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

11. Summary of the US Economy to March 2016
US Real Economic Growth and Productivity Growth

12. (2) US Unemployment and Labor Market Conditions

13. (3) Inflation and Asset Prices
Shiller CAPE

15. (4)-a US Trade and Manufacturing

16. (4)-b US Trade and Manufacturing (continued)

17. 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

18. Summary of the EA-19 Economy March 2016
(1) EA Real Economic Growth and Productivity

19. (2) EA -19 Unemployment and Labor Market Conditions

20. (3) EA Inflation and Asset Prices

21. (4) EA Trade and Manufacturing

22. (4) EA Trade and Manufacturing (continued)