The following assignment compares the key variables of the accounting identity of five of the six biggest countries (measured by 2010 GDP) of the world. These countries are China, Germany, Japan, the United Kingdom (UK) and the United States.
The variables which will be examined empirically are private savings (S), public savings (T - G), investments (I) and current account balance (CA).
The period is stretched from 2000 to 2010. All values will be presented as a percentage to the GDP of each nation.
Inhaltsverzeichnis (Table of Contents)
- Macroeconomic Balances
- Private Savings
- Public Savings
- Investments
- Current Account Balance
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This assignment compares the key macroeconomic variables of five of the world's largest economies (China, Germany, Japan, the United Kingdom, and the United States) from 2000 to 2010. The analysis focuses on the relationship between private savings, public savings, investments, and the current account balance.
- Comparison of macroeconomic balances across five major economies
- Examination of the relationship between private savings, public savings, investments, and the current account balance
- Analysis of the impact of the financial crisis on macroeconomic balances
- Exploration of the role of government spending in economic rebalancing
- Investigation of the potential impact of herding behavior on private savings
Zusammenfassung der Kapitel (Chapter Summaries)
The assignment begins with an overview of the accounting identity, which relates private savings, public savings, investments, and the current account balance. The analysis then examines the development of each of these variables from 2000 to 2010, highlighting key trends and differences across the five countries.
- Private Savings: The analysis shows that China has significantly higher private savings than the other countries, with its private savings rate consistently increasing throughout the decade. In contrast, the other countries exhibit more stable private savings rates, with a slight increase during the financial crisis.
- Public Savings: Public savings are examined, revealing that Japan's public savings are consistently negative, while the other countries experienced a decline in public savings during the financial crisis. The analysis also points to a high correlation between public savings in the five countries, suggesting a shared pattern in their macroeconomic policies.
- Investments: The analysis highlights China's significantly higher investment rate compared to the other countries, particularly during the financial crisis. The other countries experienced a reduction in investments, suggesting that they relied more heavily on debt financing during that period.
Schlüsselwörter (Keywords)
The primary focus of this assignment is on macroeconomic balances, including private savings, public savings, investments, and the current account balance. It explores the impact of the financial crisis on these variables, as well as the role of government spending in economic rebalancing. The assignment also touches on the concept of herding behavior, which is observed in private savings trends across the five countries.
- Quote paper
- Tobias Kleinmann (Author), 2011, Macroeconomic Balances, Munich, GRIN Verlag, https://www.grin.com/document/189340
