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Current macroeconomic
situation in Germany
Martin Wenke
Niederrhein University of Applied Sciences
Faculty of Business Administration and Economics
Mönchengladbach, Germany
Niederrhein Institute for Regional and Structural Research (NIERS)
Institute of Business Ethics and Sustainability (EthNa)
Institute for Applied Sciences (IAW)
Folie 1
Highlight: 2014 recent news headlines (F.A.Z.)
• September: Business sentiment slumps again – and more than expected
• July: Monthly exports first time above 100 bill € threshold
• August: High order plus of industry dampens recession fears
• September: Higher purchasing power of households: wages grew faster
than prices
• Summer: Euro zone inflation close to zero
• Summer: ECB under pressure
• Summer: Germany’s strong industry
• July: Unemployment growing
• Traffic jam blues
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Part III
Business Cycles and
Keynesian Economics
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Macroeconomic Theory and Time Horizon
Output
Long term production capacity/potential
neoclassical theory
Short term, actual measured production;
Keynesian theory
Time
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Economic fluctuations – Business Cycle
Phases of a Cycle
% change of
real GDP
upper turning
point; peak,
boom
amplitude
expansion
contraction
cycle
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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lower turning
point, trough,
recession
Business Cycle – Theoretical basics of Keynesian
model
Medium/long term view (Neoclassical Macroeconomics):
Aggregate Supply (max)
= Production Capacity
= f(Labour, Capital, Land)
Short term view (Keynesian Macroeconomics)
Aggregate Supply (current)
= f(Aggregate Demand)
Aggregate Demand (GDP)
=
Private Consumption (PC)
+ Governmental Expenditures (GE)
+ Capital Formation (real Inv.) (CF)
+ Export (EX) [- Import (IM)]
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Business Cycle – Theoretical basics of Keynesian
model – model of the entire economy
(+) (-) (-)
(+)
PC = f(PDY, i, UR, CCI)
(+/-)
(-) (+)
(-)
(-)
GE = f(%GDPc/%GDPa, i, TXR, AGD, GDL)
(+)
= GDP
(-) (+)
CF = f(GDPc/GDPp, i, BSI)
(+)
(-)
(-)
(+)
EX = f(%WT, CER, TOT, IICP)
-IM = f(PC, CF, EX)
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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06/1991
12/1991
06/1992
12/1992
06/1993
12/1993
06/1994
12/1994
06/1995
12/1995
06/1996
12/1996
06/1997
12/1997
06/1998
12/1998
06/1999
12/1999
06/2000
12/2000
06/2001
12/2001
06/2002
12/2002
06/2003
12/2003
06/2004
12/2004
06/2005
12/2005
06/2006
12/2006
06/2007
12/2007
06/2008
12/2008
06/2009
12/2009
06/2010
12/2010
06/2011
12/2011
06/2012
12/2012
06/2013
12/2013
06/2014
Highlight: Managers sentiment and their confidence in
Germanys economy - results of Ifo poll – 2005 = 100
130.0
120.0
110.0
Index
Current
Expectation
100.0
90.0
80.0
70.0
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Highlights: Current economic situation in Germany
The Ifo Business Climate Index is based on ap. 7,000 monthly survey responses of firms in manufacturing,
construction, wholesaling and retailing. The firms are asked to give their assessments of the current business
situation and their expectations for the next six months. They can characterise their situation as “good”,
“satisfactorily” or “poor” and their business expectations for the next six months as “more favourable”,
“unchanged” or “more unfavourable”. The balance value of the current business situation is the difference of
the percentages of the responses “good” and “poor”, the balance value of the expectations is the difference of
the percentages of the responses “more favourable” and “more unfavourable”. The business climate is a
transformed mean of the balances of the business situation and the expectations.
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Business Cycle – Application Autumn 2014: Results of
Joint Economic Forecast
Main economic indicators
Component
2010
2011
2012
2013
2014
2015
GDP, real %
4,1
3,6
0,4
0,1
1,3
1,2
Unemployment rate %
7,7
7,1
6,8
6,9
6,7
6,8
41 020
41 570
42 033
42 281
42 605
42 653
Inflation %
1,1
2,1
2,0
1,5
1,0
1,4
Unit Labor Costs %
-1,5
0,4
3,1
2,2
1,8
2,3
Current governm. Debt
% of GDP
-4,0
-0,8
0,1
0,3
0,3
0,1
Trade surplus in % of
GDP
5,7
6,1
7,1
6,8
6,9
6,6
Employment 1 000 p
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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Business Cycle – Application Autumn 2014: Results of
Joint Economic Forecast
Final Demand Components, constant 2010 prices, in %
(Lundberg growth contribution)
Component
2013
2014
2015
0,1
1,3
1,2
Private Consumption
0,8
(0,5)
0,8
(0,5)
1,4
(0,9)
Governmental
Expenditures
0,7
(0,1)
0,9
(0,2)
1
(0,2)
Capital Formation
-0,7
(-0,0)
3,2
(0,8)
2,7
(0,4)
Exports
1,6
(0,7)
3,2
(1,5)
4,4
(2,0)
Imports
3,1
(-1,2)
4,2
(-1,7)
5,7
(-2,3)
GDP
| 03.09.2009 | BBA404 Macroeconomics | Prof. Dr. Martin Wenke | Economics Ecology and Ethics | Folie
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