Transcript Kein Folientitel

financial
markets
• exchange rates
• price level
• interest rates
goods
markets
labor
markets
• economy
• sales
expectations
•labor costs
•workers’
qualification
company
as a system
government
technology
• innovations
• know-how
foreign
countries
• financial policy
• laws and
regulations
Competing on:
•location
•innovation
•gov. policies
•prices
1
economic schools of thaught
goals of economic policy
economic agents
central bank
government
partners of wage
agreement
monetary policy
fiscal policy
wage policy
application of instruments to achieve goals
discretionary (occasional control)
regulation bound (active, passive)
automatic effect of instruments
2
supply-side
long-term
demand-side
short-term
(Neo)Classical
Keynesianism
creation of appropriate
conditions for market dynamics
(stability of private sector)
active stabilization
policy to compensate
instability of private sector
steady,
regulation bound
growth policy
anti-cyclical
discretionary
characteristics
theoretical
basis
government
view
strategy
real
GDP
stabilization policy
growth
real
GDP
trend
time
time
3
unemployment rate
in %
1995: 8,8
2000: 9,3
10
9
8
7
6
5
4
3
net exports
(exports - imports)
in % of GDP
2
1
5
1995: 0,6
2000: 1,9
4
3
2
1
1
2
3
4
5
growth of real
GDP
in %
1995: 1,7
2000: 3,0
1
2
3
4
year 2000
5
inflation rate in %
(consumer prices)
1995: 1,9
2000: 1,4
year 1995
4
Level of goals
contents
macroeconomic
level
• price stability
• high employment
• appropriate economic growth
• foreign trade equilibrium
• fair distribution of income and property
•environmental protection
• balanced budget
meso-economic
level
(structural goals)
• balancing of regional wages
• efficient supply of energy
• reduction of subsidies
microeconomic
level
• freedom of decision-making for companies and private households
• freedom of contract
• competition
European level
• continued, non-inflationary and ecologically sustainable growth
• high employment level
• high level and stable social net
• increase in quality of life
• convergence of economic output among member states
5
objective
stability of price level
appropriate,
continuous growth
high employment level
foreign trade equilibrium
stable gov. financing:
„Budget criteria“
of the Maastricht Treaty
„fair“ income
distribution
indicator (measurable)
objective
result
projection
change of cost-of-living-index or
of harmonized consumer price
index in %
< 2%
growth of real GDP in %
2-3%
unemployment rate in %
< 10%
part of exports and imports balance
in % of GDP
current budget deficit
in % of GDP
current government debt
in % of GDP
difference
1,5-2%
< 3%
< 60%
growth of wages in %
< 2%
growth of profit in %
< 3%
6
time
“gap analysis” (comparison of target/actual values)
no need for action
need for action
retaining of
previous economic
policy
cause analysis
choice and application
of instruments
evaluation of effects of
applied instruments
7
• order inflows
• building permissions
• orders
• share prices
• profit expectations
business
climate
consumption
climate
income expectations
early indicators
-9
-6
-3
• production
• investment
• consumption
• capacity
utilisation
unemployment
retail sales
prices
present
indicators
late indicators
0
wages
3
6
months
8
central bank
(autonomous)
• national
• European
parties,
parliament
government
• national (Federal Government and
the Länder)
• European (Council of Ministers)
associations
bureaucracies
unions and
management
• ministries
• EU-Commission
population (electorate)
9
differentiation criteria
examples
intensitiy of governm. intervention
• big
command
• production prohibition, production commandment
• medium
inducement
• changes in taxes and interest rates
• small
voting
• wage negotiations
arranging
• qualitative
• reduction of bureaucratic restraints
• quantitative
• changes in taxes and interest rates
scope for decision-making
• big
discretionary,
occasionally
• changes in taxes and interest rates in discretion
• small
bound by rules
• obligations of intervention in the EMS II
• sanctions of the Stability Pact
• none
automatism
• due to progressive taxation
- automatic loss of taxes in recession
- automatic surplus of taxes in boom
10
directorate
president
four other
members
vice president
• nomination by EU Council of governments heads
• single period of 8 years, re-election not possible
administration of current transactions
extended
by
Non-EMU
members
• GB
• DK
• CH
ECB Council (supreme committee of decision of ESCB)
D
GR
F
I
A
E
IRL
P
B
L
FIN
NL
presidents of national central banks from the
current twelve member states of the EMU
• nomination in national procedure
• period 5 years, re-election possible
11
M
Pn
Yr
U
reference value for 1 year
M3 = 4.5%
stable development
of prices
P n < 2%
potential growth of
real GDP
Yr
change of velocity
of money circulation
= 2 to 2.5%
If
M3 > 4,5%,
inflationary risk will be signalled
result
due to the forerun character
of money supply
U = - 0.5 to -1%
In-depth analysis of causes
if necessary application of
instruments of monetary policy
12
fiscal policy
Re-distribution
stabilisation
allocation
anti-cyclical
cycle-independent
discretionary
rule bound
built-in flexibility
13
department
objective (examples)
minister of finance
• allocation
• distribution
• stabilization
• fiscal objectives
minister of
economics
minister of social
affairs and labour
superior:
• improvement of production conditions of
location Germany
• safeguarding competitive environment
• sustained economic growth
• reduction of unemployment
• financing of social security systems
(e.g. pension funds)
14
GDP
growth trend
business cycle
time
budget
0
time
+
budget surpluses
in boom
budget deficit
in recession;
limited by
Art. 115 Constitution and
criteria of Maastricht
15
tax policy
stabilization
influencing of
economic
situation and
growth
(fiscal policy)
distribution
allocation
correction of
income and
property
distribution
influencing
the use of
factors of
production
and the
consumption of
goods & services
16
income tax burden
in %
50
48,5%
42%
40
marginal tax burden
tariff 2002
30
tariff 2005
20
average tax burden
19,9%
15%
10
taxable income
in EUR
0
0
5
10
15
20
25
30
35
40
45
50
55
60
17
example 1999
figures in billion EUR
government expenditure
1
wide analysis
2
tight analysis
(expenditure concept)
3
tight analysis
(consumer concept)
941
= 0,4863 = 48,63%
GDP (nominal)
1.935
government consumption
expenditures
369
GDP
1.935
collective consumption
= 0,1906 = 19,06%
154
= 0,0795 = 7,95%
GDP
1.935
Ad
1
inclusive monetary transfers of social security,
attributable property transfers
Ad
2
without monetary transfers of social security
Ad
3
without direct attributable property transfers of government to private households
18
government
deficit,
loan-financed (+)
government fixed
capital formation (+)
gross domestic
product,
nominal (+)
money market effect
interest rate (+)
price level (+)
negative effect on other
Components of aggregate demand
19
net borrowing
= revenues - expenditures
(of one financial year)
net borrowing of government
deficit ratio
=
GDP (nominal)
debt ratio
debt per capita
interest payment
burden ratio
=
=
=
total government debt
GDP (nominal)
total government debt
population
interest payment of government debt
GDP (nominal) or government expenditure
20
bill. EUR
expenditures
250
21
253
net
govern- 15
ment
borrowing
238
257
0
5
budget
surplus
10
247
revenues
229
2002
2003
2004
2005
2006
2007
21
autonomous
partners in wage
negotiations
trade unions
employers
objective
high wage increases to improve income distribution
position of employees,
depending on national economic labor market
situation:
wage restraint where necessary,
if jobs are created in return
low wage increases;
high net profits
and flexible labor market regulations,
which give scope for investment and
meet the companies‘ needs
22
companies
employees‘ contribution
to social security
taxes
disposable income
real disposable income
net wages
gross wages
employers‘ contribution
to social security
compensation of
employees
private households
prices
23
key figures
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
production result
working hours
productivity of labor (1:2)
wages per hour
sum of wages (2x4)
unit labor costs (5:1)
material costs/unit
other costs/unit
costs/unit (6+7+8)
selling price
revenue (10x1)
costs (9x1)
profit (11–12)
profit/sum of wages (13:5)
initial position
4.000
1.000
4
16
16.000
4
25
10
39
40
160.000
156.000
4.000
0,25
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
output-related
wages policy
4.200
1.000
4,2
16,8
16.800
4
25
10
39
40
168.000
163.800
4.200
0,25
(+ 5%)
EUR (+ 5%)
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR (+ 5%)
results:
a) No cost push from wage increases and hence no price increase
b) increase of productivity will be equally distributed on labor and capital (5%)
c) income distribution (profit/sum of wages ) remains unchanged
24
feedback if missing of goal is persistent
recognition
lag
• information
effect lag
decision
lag
• diagnosis
• cause
realization
lag
• starting
• development
time
internal lag
external lag
25