TB24 Germany (Group 3) by Teh Wei Lin Natalyn

TB24 Germany (Group 3) by Teh Wei Lin Natalyn https://padlet.com/s10179122/n4tfts6qfefj Natalyn, Clarence, Jolene, Mishal, Tiffany en-us 2017-11-05 15:47:32 UTC 2018-11-23 04:54:28 UTC hello@padlet.com Germany GDP s10179122 https://padlet.com/s10179122/n4tfts6qfefj/wish/203644367 TOPIC- GDP

A forecast was recently published in the German papers that there would be a steady economic growth for Germany in the later quarters of 2017 and the year 2018, both being increasingly higher. Furthermore, there is a government budget surplus of $36.4 billion this year, which amounts to one whole percent of their GDP with it being the highest since reunification. This shows that the economy is experiencing the natural rate of unemployment where they are expanding or near its peak.

With accordance to the article, this predicted increase of GDP was based on strong domestic consumption, private and public investments - particularly in Research & Development and Equipment, and the steady recovery of Germany as an export-driven economy.Thus, using the expenditure approach, as there is more expenditure per household(C), more investments by films(I), larger government budget surplus to boost the economy by spending on goods and services(G) and having strong export trade(X), this would all result in an increase in GDP. Using the flow of income table, it can be deduced that with the increasingly high expenditure of the economy, reaps an exceptionally large income earned per household.

However, despite a healthy growth rate, the German government must be mindful of the possibility of an overheated economy, and policy decisions solely geared towards expansionary aims might be detrimental to the economy in the long run. They should, and indeed have been considering long-term policy goals to keep this growth sustainable, through measures such as the maintenance of budget surplus, improved labor laws to further enhance work-life balance, and further loosening of government regulations hindering innovation and accelerated movement into digital change. This will enable Germany to expand their productive capacity in the long run, allowing them to achieve positive, sustainable economic growth.]]> 2017-11-05 16:14:30 UTC https://padlet.com/s10179122/n4tfts6qfefj/wish/203644367 Germany Inflation joleness https://padlet.com/s10179122/n4tfts6qfefj/wish/206267723 TOPIC-Inflation

Recently, Germany has been experiencing disinflation. Disinflation is a reduction in the rate of inflation in the current year compared to previous years. Just this year, from September to October 2017, the preliminary inflation of Germany has decreased by 0.4 percent. Prices were subdued and disinflation occurred in most sectors. The

Inflation rate is lower than what was predicted earlier on in 2017, hence the softening of inflation is not likely to be due to one-time factors, and is likely to continue. This will lessen the risks that would have come with a higher inflation rate.

The softening of inflation will aid with the continuation of easy monetary policies in Germany, enabling the money supply to increase. This is so that Interest rates will not spike unexpectedly and taking loans from the bank will not become increasingly difficult for citizens. Especially during inflation, the borrowers would be the winners since the real interest rate that is paid by the borrowers is less than the stated nominal interest rate.

Disinflation has brought good news to Germany, but there are the risks as well. Germany has previously predicted a higher inflation rate, which resulted in the European Central Bank deciding to put off its asset purchase program until the end of 2018. However, now the inflation rate seems to have become gentler and steadier, which means that there will not be any sudden spike in inflation rate, until the asset purchase program starts in 2018. This creates the risk of the first spike in interest rate to occur later on than was previously expected.

]]> 2017-11-13 14:59:04 UTC https://padlet.com/s10179122/n4tfts6qfefj/wish/206267723 Germany Unemployment s10179122 https://padlet.com/s10179122/n4tfts6qfefj/wish/206270248 TOPIC- Unemployment

Last month, Germany experienced a decline in unemployment (more specifically cyclical unemployment). This can be attributed to the strengthening and growing economic performance of the country, with the demand for labour surging, leading to more jobs being created, and cyclical unemployment will fall with an upswing in the business cycle.

However, despite this increase in unemployment, it is imperative to note that the quality of workers are still relatively stagnant, with many workers still remaining in low-wage jobs, and wage increase are unlikely to occur in the near future. This is prevalent not just in Germany, but throughout all 19 nations in the eurozone.

This brings about the possibility of future structural unemployment. The German labour force, primarily consisting of many low-wage job positions, may find themselves in an unfavourable condition should companies upgrade their processes and displace their manual labour with the latest cutting-edge technology. Only workers with the necessary skills and capable of operating these machinery will be able to retain their jobs in such a scenario. Hence, it would be necessary for the government to consider adopting skills-upgrading courses and retraining to improve the quality of the workforce rather than to have a growth-centric approach in their policy formulations.

Any form of expansionist measures to further boost the economy may lead to even more jobs being created, and wages may fall further, eventually leaving a nation of unskilled workers ill-prepared to handle the challenges of the future.]]> 2017-11-13 15:02:34 UTC https://padlet.com/s10179122/n4tfts6qfefj/wish/206270248 Wang's Comments I_M_WANG https://padlet.com/s10179122/n4tfts6qfefj/wish/210004019 Quality prelim analysis for all three economic concepts. Your team is ready to print out a hard copy of this padlet and drop it into my pigeon hole at BA office, level 9, by 1st Dec. Of course, if you want to work on it a bit more (see below), no problem! Otherwise, time to kick start your report writing. Some suggestions for you to explore stated below. But don't be restricted by these suggestions.

GDP:
Further questions for thoughts (consider addressing this in padlet and/or report):
1. Check full employment % of Germany to conclude that the economy is experiencing natural rate of unemployment (highlighted).
2. How important is international trade to Germany's GDP? What caused the steady recovery in exports demand?
3. How would improvements in labor laws such as work life balance and lax in innovation regulation helped to improve productive capacity? Find out more about these government policies if you want.
4. "premier manufacturing location" was mentioned in the article. How would this affect Germany's economy?

Unemployment:
1. Yes. Productivity issues been an ongoing concern in UK. Good to continue with your research on the existing policies or "going-to-be-implemented" policies by the government to contain structural unemployment/real wage growth.
2. In terms of falling cyclical unemployment, it would be good to associate it with the positive outlook of the economy (GDP).

Inflation:
This article doesn't cover much on the cause of inflation, restricting your prelim analysis. Nonetheless, I still see good effort in analyzing!
1. What is Germany's targeted inflation. Comparing it to the current rate, is disinflation a worrying trend?
2. Might want to explore further on the dampening of the demand-pull and or cost-push inflation.
3. We will learn more about monetary policy in a few weeks time and good work in explaining the impact on cost of borrowing. Continuing from your explanation, how would keeping interest rate low impact general price levels? ]]> 2017-11-25 06:49:58 UTC https://padlet.com/s10179122/n4tfts6qfefj/wish/210004019