Data Collection, Presentation And Analysis For Economic Data Of Australia, Germany, Greece And An Asian Country

Table 1: GDP per capita (constant 2010 US$)

Table 1: GDP per capita (constant 2010 US$)

Source: The World Bank

Table 2: Australia’s GDP growth, Inflation, and Unemployment rates

Source: The World Bank

Table 3: Germany’s GDP growth, Inflation, and Unemployment rates

Source: The World Bank

Table 4: Greece’s GDP growth, Inflation, and Unemployment rates

Source: The World Bank

Table 5: Singapore’s GDP growth, Inflation, and Unemployment rates

Source: The World Bank

Economic Analysis

Graph 1: Australia’s economic outlook (2005-2016)

Source: Table two

The relationship between Australia’s Gross Domestic Product and the Unemployment rate is in agreement with Okun’s law, that is, there is a negative correlation between Gross Domestic Product growth and unemployment (Arnold, 2013). Between 2005 and 2008, unemployment in Australia was on the decline. In 2005 unemployment rate was 5.03% and 4.54% in 2008. In the same period, the Gross Domestic Product expanded, that is, from 3.20% in 2005 to 3.70% in 2008 (The World Bank, 2017). Similar trend was recorded in 2010 to 2011 and in 2015 to 2016. On the other hand, unemployment levels were high in 2009, 2013, 2014 and 2015. Consequently, during these financial years, the economy of Australia slowed down.

This kind of correlation shows the importance of employment in accelerating economic growth. A decline in unemployment is an indication that employment rate is high. Thus, when more people are employed, the consumption and investments in an economy will increase resulting in growth in the aggregate demand and hence a rise the real Gross Domestic Product (Sloman, Wride, & Garratt, 2015). Between 2005 and 2016, the lowest economic growth in Australia was recorded in 2009, that is, 1.81%. This weak growth was caused by the Global Financial Crisis of 2008-2009. The decline in demand during this crisis resulted in a drop in the aggregate demand and hence a rise in unemployment and slowdown in economic growth.

In some years, inflation and GDP growth exhibited positive correlation while in other years, these variables moved in a different direction. For example, in 2013, the economic growth was 2.57% compared to 3.63% growth recorded in 2012. Similarly, inflation in 2013 was -0.17% compared to 2.06% of 2012. This scenario exhibits that a drop in the real GDP resulting from a decline in the aggregate demand results in a decrease in the price levels. However, in 2009, inflation increased as the economy slowed down. This correlation can be attributed to expansionary monetary and fiscal policies introduced by the government of Australia during the Global Financial Crisis (GFC) (Australian Government, 2015). These expansionary policies increased the amount of money in circulation and hence higher inflation.

Table 2: Australia’s GDP growth, Inflation, and Unemployment rates

There is a tradeoff between inflation and unemployment rate. When unemployment declines, inflation increases and when unemployment rises, inflation falls. In 2005, the level of unemployment was 5.03% whereas inflation stood at 3.71%. On the contrary, in 2011 inflation was higher, 6.18% whereas unemployment was low, 5.08% (The World Bank, 2017). This tradeoff between unemployment and inflation results from government policies of stabilizing the economy. When the government wants to reduce unemployment, it deploys expansionary economic policies. Such schemes stimulate demand leading to growth in the economy and employment creation. Inflation occurs when the aggregate supply fails to respond to the surging demand. Further, the use of contractionary policies to reduce inflation often results in a rise in unemployment (Goodwin, Nelson, & Harris, 2014).

Graph 2: Germany’s economic outlook (2005-2016)

Source: Table three

Between 2005 and 2016, unemployment in Germany has been on the decline though the economy has been on slow down.  In 2006, unemployment fell to 10.25% from 11.17% in 2005 following an increase in economic growth of 3.70% from 0.71% recorded in 2005 similar trend was also observed in 2010. This relation demonstrates that a rise in the output accelerates employment creation. However, during the Global Financial Crisis, unemployment did not increase significantly although Germany’s economy went into recession in 2009.

In the past one decade, Germany has had relatively low levels of inflation. The relation between inflation and GDP growth varied in different years. For example, in 2006, Germany’s economy expanded while inflation declined. It can be argued this economic expansion did result from an increase in the aggregate demand. It may have resulted from supply side factors such as improvement in technology and labor productivity. On the contrary, in 2008, Gross Domestic Product declined, and inflation also dropped. It is evident that the decline in GDP resulted from a decrease in the aggregate demand and that is why inflation also reduced during this financial year.

From 2005 to 2016, unemployment exceeded the level of inflation. However, it should be noted that unemployment rate in this country is also on the decline. The low inflation in Germany is attributed to low prices of oil (BBC, 2015). Reduction in oil price has resulted in a decrease in the cost of production. As a result, the aggregate supply has grown leading to a decrease in the general prices and increase in the real Gross Domestic Product and a rise in the employment rate.

Table 3: Germany’s GDP growth, Inflation, and Unemployment rates

Graph 3: Greece’s economic outlook (2005-2016)

Source: Table four

As the Gross Domestic Product has been declining, the level of unemployment in Greece has been increasing. Unemployment started rising in 2009 during the Great Depression and reached high in 2013, 27.47%. The economic problems facing Greece are attributed to large external debt that has negatively affected its credits worthiness and scaring investors. Therefore, low consumption and investments have led to deterioration in the aggregate demand and economic growth.

The decline in the GDP growth has resulted in low levels of inflation and even deflation in some financial years. With significant funds going in debt payment, Greece has remained with little finances to stimulate investments and consumption in the economy. Hence, the aggregate demand has reduced leading to a decline in the general prices and economic contraction.

On the onset of Global Financial Crisis in 2008, unemployment started rising while inflation began falling. This trend resulted from insufficient aggregate demand. When the total demand in an economy reduces, there will be a decline in the Gross Domestic Product and price levels. Moreover, with weak demand for products, companies scale back their production (Boyes & Melvin, 2012). Hence, the demand for labor declines causing a rise in unemployment. In some severe situations, some companies fire their employees and others may close down.

Graph 4: Singapore’s economic outlook (2005-2016)

Source: Table Five

A rise in Singapore’s GDP leads to a drop in the level of unemployment. For instance, in 2006, GDP growth was 8.86% compared to 7.49% in 2005. This increase in Gross Domestic Product made unemployment to decrease to 4.48% from 5.59% during the same period. Also, when the country’s economy went into recession in 2009, unemployment rose to 4.30% from 3.96% (The World Bank, 2017). Therefore, GDP expansion plays a significant role in employment creation in Singapore’s’ economy.

GDP Growth and Inflation

Singapore is experiencing low levels of inflation and also deflation in a few financial years. The country has been in a position to register remarkable economic expansion even during deflation. For example, in 2010, Singapore’s economy expanded by 15.24% while inflation was -0.05%. This trend shows that the expansion in GDP may have resulted from supply side factors such as improvement in labor productivity and technological development. However, in the recent years, Singapore has experienced moderate growth in GDP. Studies show that low levels of inflation and deflation have contributed to this sluggish growth (LEE, 2015).

Table 4: Greece’s GDP growth, Inflation, and Unemployment rates

Unemployment and Inflation

There exist a negative correlation between unemployment and inflation in Singapore. When inflation is low, the level of unemployment is high, and when inflation is higher, unemployment declines. For instance, in 2005, inflation was 2.23% whereas unemployment stood at 5.59%. Similarly, in 2016, unemployment was 1.83% whereas inflation was -1.44%. This relationship demonstrates that when a country chooses to reduce unemployment, inflation will be high and when it targets inflation, unemployment will soar.

Graph 5: Comparison

Source: Table two, three, four and five

These economies suffered differently during the Global Financial Crisis of 2008 and 2009. Among these four countries, Australia faired on well as its economy did not go into recession. This country just encountered a slowdown in economic growth, that is, from 3.70% in 2008 to 1.81% in 2009. Germany, Singapore, and Greece went into a recession that the magnitude of contraction differed. Germany’s economy contracted to -5.62%, Singapore -0.60%, and Greece -4.30. Moreover, unemployment level during the Great Depression of 2009 differed from country to country. Greece registered the highest level of unemployment, 9.62% while Singapore recorded the lowest rate 4.3%.

The economic outlook of the four countries shows that their recovery from the effects of the Great Depression of 2009 differs. For example, Singapore managed to recover quickly by registering a remarkable economic growth of 15.24% in 2010 (The World Bank, 2017). Australia and Germany also faired on well after the crisis. However, Greece has not yet recovered from the effects of this Global Financial Crisis. Since 2009, the country’s economy has gone in a recession five times.

In the recent years, that is, 2015 and 2016, all these economies have recorded an increase in the GDP growth. Australia’s GDP improved from 2.42% to 2.77%, Germany from 1.72% to 1.87%, Greece from -0.22% and Singapore from 1.93% to 2.00% (The World Bank, 2017).

Graph 6: Data extracted from OECD

Graph 7: Living standards

Though money cannot buy happiness, it contributes to better living standards and hence greater well-being. Australians have higher disposable incomes which enable them to have access to quality housing, health, and education. The GDP per capita of Australia exceeds that of Germany and Greece (The World bank, 2017). This scenario is an indication that Australians have higher living standards and hence greater satisfaction.

Good personal relationships and contacts are vital for the well being of humans. Active community and social networks are instrumental in availing the emotional support needed for better existence. Studies show that 95% of Australians have someone to rely on and thus they have a quality support network which contributes to their life satisfaction (OECD , 2017).

Table 5: Singapore’s GDP growth, Inflation, and Unemployment rates

Education is a key factor in economic and social development. Through education, individuals gain the skills and knowledge required for labor participation. In Australia, education attainment rate is 77.1% meaning that most of the Australians have access to education (OECD , 2017). As a result, they have access to jobs to earn income for their upkeep.

The quality of environment affects the well-being and health of individuals. An environment that is highly polluted causes severe health problems. When it comes to air pollution, Australia has the lowest rate is ranked one out of thirty-eight. Also, 94% of the Australians have access to clean water and thus high life satisfaction.

Like Australia, the GDP per capita of Germany is rising steadily. This scenario shows that the living standards of persons in this country are on the rise. With better incomes, individuals have access better health care, education, and housing units. Moreover, Germany has policies in place to low-paid people.

In Germany, 92% individuals have someone to rely on in case they are in need of help (OECD , 2017). Hence, there exist real social networks which enable people to get the needed emotional support which contributes to the well being. The programs that help migrants to integrate into the community are also contributing to life satisfaction.

86.9% educational attainment rate shows that a significant portion of Germany’s population has access to education (OECD , 2017). Education plays a vital role in eliminating inequality in the society. People get employed while others start their businesses ventures thus reducing problems associated with poverty.

Better Health

Germany has a life expectancy of 81 years (OECD , 2017). This situation exhibits that the leadership of this country has put in place mechanism to ensure that the citizens have access to better health. Good health is, therefore, contributing to life satisfaction.

Greece has a low life satisfaction ranking. Low income is one of the factors that contribute to this low rate. Since the Global Financial Crisis, the GDP per capita of Greece has been on the decline. Therefore, the standards of living are deteriorating resulting in dissatisfaction.

Support Network

In Greece, the quality support network rate is 83.4% which is below OECD average of 88% (OECD , 2017). This is a sign of weak social networks which is likely to result in minimum economic opportunities, lack of or little emotional support and finally, lead to feelings of isolation.

Environment

The low life satisfaction score in Greece is also attributed to environmental pollution. Air pollution in this country is high, and that majority of individuals have no access to clean water. Great amount pollution is known to cause health problems which are detrimental to the well-being of people.

Education is vital for the social and economic development of a country. Greece’s educational attainment rate is 68.3% which falls under the OECD standard of 76% (OECD , 2017). The low levels of education are hindering the ability of the population to secure employment for their upkeep and thus low life satisfaction.

Arnold, R. A. (2013). Economics. Mason, Ohio: South-Western.

Australian Government. (2015). The Great Depression. Retrieved September 15th, 2017, from https://www.australia.gov.au/about-australia/australian-story/great-depression

BBC. (2015, January 15th). German inflation falls to five-year low. Retrieved September 14th, 2017, from https://www.bbc.com/news/business-30681319

Boyes, W. J., & Melvin, M. (2012). Macroeconomics. Mason, OH: South Western.

Goodwin, N. R., Nelson, J. A., & Harris, J. (2014). Macroeconomics in context. Armonk, New York: M.E. Sharpe.

LEE, S. A. (2015). GOVERNANCE AND ECONOMIC CHANGE IN SINGAPORE. Singapore Economic Review , 1-15.

OECD . (2017). Better Life Index. Retrieved September 15th, 2017, from https://www.oecdbetterlifeindex.org/#/11111111111

Sloman, J., Wride, A., & Garratt, D. (2015). Economics (9th ed.). Harlow : Pearson.

The World Bank. (2017). GDP growth (annual %). Retrieved September 13th, 2017, from The World Bank: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2016&locations=DE-SG-GR-AU&start=2005

The World bank. (2017, August 2nd). GDP per capita (constant 2010 US$). Retrieved September 13th, 2017, from https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?end=2016&locations=AU-GR-DE-SG&start=2005

The World Bank. (2017). Inflation, GDP deflator (annual %). Retrieved September 13th, 2017, from The World Bank: https://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG?end=2016&locations=AU-GR-DE-SG&start=2005

The World Bank. (2017). Unemployment, total (% of total labor force) (modeled ILO estimate). Retrieved September 13th, 2017, from https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?end=2016&locations=AU-DE-GR-SG&start=2005

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