Transcript Macroeconomics, foreign trade and the European Union

Macroeconomics, foreign trade and the
European Union. Basics and Examples.
Lecture at Irkutsk State University; Mathematical
Faculty Nov. 29th-Dec.3rd
Macroeconomics, foreign trade and European Union. Basics.
 Lecturer: Dipl.-Kfm. Thomas Stiegler
 2002 – 2007 studies in business administration in Göttingen
 2007 – date
scientific assistent, lecturer in Macroeconomics at
Economic faculty of Göttingen University
 PhD thesis on the economical convergence processes in former
socialistic states.
 09.2010 – 09.2011 at ИГУ through Erasmus Mundus programme of
European Union
 email: [email protected]
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
1. What is Macroeconomics?
• aggregated parameters at national / international scale
• parameters are observed on markets
• all three markets can be influenced by the state
macroeconomics analyzes the actions of the
stakeholders and predicts its consequences!
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
Is there any practical use of Macroeconomics?
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the state can influence any market! How should the state act
on the markets?
 how can the national wealth be improved?
 how can inflationary tendencies be avoided?
 are the surpluses/deficits in foreign trade sustainable or
should the state act? How can he act?
 which exchange rate policy is useful?
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
Fields of action of the state
• the state acts mainly in two economic fields:
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fiscal policy :
Spending of the state, taxes, social aid,
subsidies for companies etc.
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monetary policy:
Interest rates, supply with money etc.
However fields like Competition laws, Foreign (trade) policy, Social politics,
Education politics interact with questions like above.
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
What macroeconomic does
To summarize:
• macroeconomics analyses aggregated parameters of an economy
• it tries to judge an economic situation
• it advices economic policy in order to reach a growth in national
wealth
• it analyses and evaluates international economic relations
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
2. What is the European Union?
• community of independent states
• bound by multinational treaties, valid for each member
• some authority of national states is passed over to Unions institutions
• When passed to EU: Any member has to accept the EU institution
This process lasts for over 50 years now and is deepening. However it is
argued if the way of EU is one to a national state like the USA.
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
Different competence levels in EU
In general for each field of politics there are four possibilities of the
stage of EU competences:
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Fields where the EU can pass acts and directives valid in all memberstates
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Fields where the EU passes a common politic, which has to be realized by legal
process in each single member state
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Fields where the EU works out a common position in a field, but the realization
of this is facultative for the members
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Fields where is no competence for EU politics
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
development of
member states
1957 -2007
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
A short history of European integration (1)
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after WWII European politicians tried to avoid wars by
binding war important industries together
the economical cooperation was intensified, as well on non
war important fields, political cooperation was aimed at
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
A short history of European integration (2)
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in 1967 the European Community was founded and thus the
legal framework intensified.
after intensifying cooperation in the following 20 years the
Community was enlarged from 6 member states to 12 in
1986
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
A short history of European integration (3)
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in the late 1980 a new framework was developed. EC should
be transformed in a political Union as well as real common
market.
in 1991 the European Union was founded. The common
market was realized and a common European citizenship
introduced. Border controls fell apart and every citizen
could work and live where he wants
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
A short history of European integration (4)
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in 1999 the EURO was implemented, like agreed in 1991
in 2004 and 2007 middle and eastern European stated joint
EU
2010 the constitution of the EU got into action. Making EU
more democratic as well as bringing it closer to some kind
of state. EU of today is a community of synchronized politics
as well as economic Union
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
Some basic data on EU (1)
27 member states
Population: 501 million people
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Area: 4,3 million km²
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Russia 142 million, USA 308 million
if seen as a single state, that’s world’s 3rd place after China and India
Russia 17 million km²; USA 9,6 million km²
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
Some basic data on EU (2) – the economy
GDP total:
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Russia $2,1 trillion; USA $14,2 trillion
if seen as a single state EU is the biggest economy of the world
GDP per head: $ 36.788
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$18,4 trillion
Russia $ 14.920; USA $ 46.381
Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
Where is the connection between Macro an EU?
• state acts with his fiscal and monetary policy in macroeconomics
• EU got competences from national states
•  Fiscal policy; Funds for convergence processes, agricultural policy and so on
•  Monetary policy. European Central Bank issues the money (EURO) and thus
controls this field.
• European Common market and tariff union connect states
close to each other
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Macroeconomic situation is connected closely with EU
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010
Macroeconomics, foreign trade and European Union. Basics.
What we will do in the following chapters
• Select points from macroeconomic theory or international
trade and give a short sight into the theory
• Give some examples from real macroeconomics
 To cover the whole field of EU – macro connections we could
fill years with! What we do is just some short examples to show
some applied macroeconomics.
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Dipl.- Kfm. Thomas Stiegler, University of Göttingen.
Lecture 1
29.11.2010