MAEC Project TR21 Group 3: Spain by xingyue https://padlet.com/cheryllxy2000/ien5ryjqo06q Group members: Eden, Sheng Hui, Hwee Yong, Ryan, Xing Yue en-us 2017-11-15 13:24:30 UTC 2018-01-01 09:44:39 UTC hello@padlet.com Concepts that are applicable to our topics cheryllxy2000 https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/207177867 - GDP
- Unemployment
- Keynesian Model

]]> 2017-11-15 13:47:18 UTC https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/207177867 Article 2 :The Potential Impact Of Catalan Crisis On Spanish Economy – Analysis ultimateassassin01 https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/207226203 The crisis in Catalonia, sparked by the regional government’s illegal proclamation of an independent state, is already taking a toll on the Catalan economy, and poses as a serious threat to the wider Spanish economy if the undesirable situation is prolonged. A potential heightening, or prolongation, of the political situation might adversely impact the economic outlook and financial stability in Spain. 

The Bank of Spain warned that the economy’s GDP could fall between 0.3 and 2.5 points in the next two years, 2018 and 2019, depending on how long the crisis lasts and its impact on consumption, investment, employment and financing.

Catalonia plays a key role in Spain’s economy. Its GDP is slightly larger than Portugal’s and it generates one quarter of Spain’s exports, contributing to  net exports when computing GDP in the expenditure approach.  

The most notable impact since the Catalan parliament declared independence is the increase in unemployment rate in Catalonia, specifically, an increase in structural unemployment. This is due to relocation of businesses and companies as there has been a mass departure of companies from Catalonia. Catalonia was the region whose number of registered unemployed increased the most in October (+14,698), which is its largest rise since October 2008. Its month-on-month growth in the unemployed of 3.67% was twice the rate for the whole of Spain.
On the other hand, this could lead to an increase in Gross Private Domestic Investment by companies in other parts of Spain, resulting in an increase in GDP of Spain.

In addition, Tourism numbers (Catalonia received 18 million of Spain’s 75.3 million tourists last year) and consumption have also taken a hit.

Lastly, greater uncertainty might also affect economic agents’ confidence and thereby affect their spending and investment decisions, which exerts a negative impact on economic activity and employment rate in Spain. 
]]> 2017-11-15 15:00:55 UTC https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/207226203 Article 1: Public and Private debts in Spain s10178822 https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/207302617 The article shows Spain’s economic sectors’ debt in Q2 2017. The total debt of all the sectors is 3.3 trillion euros, which is equivalent to 295% of GDP in Spain. In other words, each citizen owes three times their income in gross terms. 

First, Public debt accounts for 131% of GDP and it has risen at a pace more than doubling from the 61% of GDP in 2009. 
At the moment, the public debt is being financed cheaply because the European Central Bank is buying it, and the market sees the price it buys it at and the interest rate it provides as a good one. However, Catalonia's potential independence could fuel a critical increase in the interest rate and ECB might even stop supporting this debt, while withdrawing its purchases. 

The rest of the gross debt corresponds to the private sector: non-financial companies, 100% and households, 64%.
The financial sector takes up the biggest share in this debt, with 177%, and the foreign sector, with 76%. 

Despite this, the public debt is converted into revenues transferred to the private sector through the purchase of goods and services plus transfers. In other words, public debt eases and reduces private debt. Thus, the corporate and household sectors have managed to reduce their debt/GDP ratio from 215% to 164% today.

On top of that, there has been a Keynesian policy implementation in place of ECB monetary expansion and the expansion of government debt which has allowed Spain's economy to grow at an annual rate of 3% in three years.
]]> 2017-11-15 16:52:55 UTC https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/207302617 Wang's Comments I_M_WANG https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/210024790 Hello Team! I do see some form of prelim analysis here especially for the second article but would be great to see a little more. :)

Interesting choice of article. Prelim analysis of impact of Catalonia's potential independence on GDP noted. In your report, if you are to just focus on Catalonia's impact on Spain's GDP, please ensure there's much depth in the research of this issue. Otherwise, do also bring in one more happening in Spain that could affect the country's overall GDP. 

Here's a list of suggestions for your team to consider exploring either in padlet (in point form briefly) and/or in report (further research). You don't have to consider all and please go beyond this coverage in your report: 

- Use the expenditure approach of GDP to examine how the mentioned components impacts the economy. With this, you could use the Keynesian model to explain how these components create a more than proportionate impact on GDP (multiplier effect). 
- Specific sectors such as tourism was mentioned. How dependent is Spain on foreigners/countries? 

- "But over 800 companies have shifted their legal headquarters out of Catalonia because of the crisis..." - What type of unemployment would increase? 

Once you are happy with the updated padlet, please print out a hard copy and drop it into my pigeon hole, at BA office level 9. Let me know if you need time extension (beyond 1st Dec). Oh, and kick start your report writing soon. :) ]]> 2017-11-25 12:10:24 UTC https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/210024790 Article 3: Spain accounted as one of the worst EU countries for income inequality ultimateassassin01 https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/212510958 The article shows that Spain currently faces a large problem in its income inequality, even though its overall economy has been improving. In this case, even with an improving GDP, it is an imperfect measure of the economy situation in Spain, as there is an uneven income distribution. This means that the difference in the incomes of the richer and poorer households in Spain are quite significant compared to other countries in the EU.

It also faces a high unemployment rate with about 17.3 percent of its citizens being unemployed and it is especially prominent for the youth in Spain, with the youth unemployment rate at 40 percent. Spain's early school leaving rate is close to about 20 percent, making many youths less employable, therefore increasing the youth unemployment rate.  

However, Spain has shown efforts made to improve the situation by implementing skills training programmes targeted for the youths to enter the digital industry. This way, it helps to improve the employability of youths and preempts structural unemployment. 

Spain is also expected to face an unemployment problem in the long term as its long term unemployment rate is about 9.5 percent.]]> 2017-12-02 14:32:32 UTC https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/212510958 Overall impact on Spain's Economy and GDP cheryllxy2000 https://padlet.com/cheryllxy2000/ien5ryjqo06q/wish/212589666 GDP/ AE= C + I + G + (X - M)
As unemployment rate increases, the income level of nationals will decrease, which reduces purchasing power due to lower real disposable income and thus, reduce their spending. This decreases the consumption of households.

As business economic agents lose confidence due to a negative expectation towards the economy, businesses will reduce their spending and investment, which results in a decline in the gross private domestic investment and consumption.

Catalonia generates one quarter of Spain's exports, hence net exports of Spain will face a decline when Catalonia become independent. 

All the above will cause the aggregate expenditure to decrease, creating a multiplier effect which results in a greater cumulative change in the real GDP of Spain. The multiplier amplifies small declines in aggregate expenditures which might even turn into downturns in Real GDP, income and employment.
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