ECONOMIC NOTIONS

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ECONOMIC NOTIONS
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Economics and Macroeconomics

• Macroeconomic environment
• decissions of economic units what, how, to whom,
  when
• maximization of utility, profits etc.
• outcomes inflation, unemployment, disequlibria
• economic models Quantityf(Prices, Incomes)
• economic schools neoliberalism, neokeynesianism
• GDP
• components,
• measurement problems,
• comparisons among countries

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Methods for establishing GDP

• S(Ri-MSi) (Wj Pj Rj) C I
  G (E - IM)
•  
• value added incomes
  final demand
• with
• Ri, Msi sales and material costs of productive
  unit i,
• Wj, Pj, Rj salaries, profits and rents of
  people engaged in production,
• C personal consumption, I - investments, G
  government consumption, E exports and IM -
  imports
•  

4
GDP Structures

• PRODUCTION INCOMES FINAL DEMAND
• Value added Salaries Private
  Consumption
• Industrial Sectors Dividends Gross
  Investments
• (A-F) Retained Profits Government
  Consumption
• Services Depreciation Exports
• (G-O) - Imports
• GDP factor prices GDP factor prices
• indirect taxes indirect taxes
• - subsidies - subsidies
• GDP market prices GDP market prices GDP market
  prices
• - incomes - incomes
•  
• GNP market prices GNP market prices
• - capital depletion
• NNP market prices
•  

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Performance Indicators

• - Economic welfare and economic growth
• Capacity utilization and unemployment
• Stability and inflation
• Equilibrium internal and external
• Income and wealth distribution
• Other criteria
• Value judgements

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Economic Indicators, 2005

•  

GDP growth Inflation yearly average Current account GDP Budget balance GDP Unempl. Rate FDI net inflows GDP per capita PPP
Czech R. 6.1 1.6 -5.2 -2.6 7.9 8.2 73.8
Estonia 10.5 4.1 -14.0 1.6 7.9 16.6 60.1
Hungary 4.1 3.5 -8.6 -6.1 7.2 4.7 60.8
Latvia 10.2 6.9 -9.6 0.2 8.9 3.5 47.2
Lithuania 7.6 2.7 -6.9 -0.5 8.3 2.6 52.0
Poland 3.2 2.2 -1.5 -2.5 17.7 2.2 49.8
Slovakia 6.1 2.8 -3.0 -2.9 16.3 4.2 55.0
Slovenia 4.0 2.5 0.2 -1.8 6.5 -0.2 80.6
EU15 1.5 2.1 0.4 -2.3 7.9 -0.9 108.3
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Income Distribution
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ECONOMIC EFFICIENCY AND SOCIAL COHESION
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Basic Economic Questions

• WHAT - maximization of utility, product market,
  consumers, restrictions, planner
• HOW - maximization of profit, labor and capital
  market, producers, restrictions, planner
• TO WHOM- product and factors market, planner
• WHEN - capital market, planner

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The Pillars of the Economic Systems
Ownership Management State or social Private
Centralised state/ centralised Soviet Union private/ centralised South Korea
Decentralised social/ decentralised Yugoslavia private/ decentralised USA