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ISEO SUMMERSCHOOL
23° June 2008
Mario Baldassarri
The World Economy Toward
Global Disequilibrium
Palgrave-MacMillan, London 2007
Figure 1 - Terms of trade between developing non-oil producing countries and industrialized countries (1953-2006)
y = -0,5701x + 95,68R2 = 0,7564
60
65
70
75
80
85
90
95
100
105
110
`
Figure 2 - Terms of trade between oil producing developing countries and industrialized countries (1953-2006)
y = 8,7901x + 44,395R2 = 0,4594
60
160
260
360
460
560
660
760
860
1953
1957
1961
1965
1969
1973
1977
1981
1985
1989
1993
1997
2001
2005
`
Wolrd GDP Shares(2003)
55%45% north
south of w orld
Share of World Population(2003)
85%
15%
north
south of w orld
Map 1: World with continents weighted by Population 2003
Map 2: World with continents weighted by Agricultural Resources 2003
Map 3: World with continents weighted by Mineral Resources 2001
Map 4: World with continents weighted by Real GDP 2003
Map 5: Word with continents weighted by Real GDP, projections for 2015
Map 6: Word with continents weighted by Real GDP, projections for 2030
Wolrd GDP Shares 2003
28%
23% 23%
26% Asian Countries
Europe-25
USA
Other countries
Wolrd GDP Shares 2030
12%
15%
50%
23% Asian Countries
Europe-25
USA
Other countries
World GDP Shares (2030)
60%
40% USA, China, India
Other Countries
World PopulationShares(2030)
60%
40%USA, China, India
Other Countries
Figure 3 - G8 and G20 from 2003 to 2030 (PPP)(Actual G8 from 47% to 29%; China from 13% to 34%)
0,00
5,00
10,00
15,00
20,00
25,00
30,00
35,00
2003 2005 2010 2015 2020 2025 2030
Sh
ares
on
Wo
rld
Rea
l GD
P
China United States India Russian Federation Japan France United Kingdom Germany Italy Canada Argentina Australia Brazil Indonesia Mexico Saudi Arabia South Africa Korea, Republic of Turkey
Figure 4: "New" G8, considering Europe-25 (PPP)
0,00
5,00
10,00
15,00
20,00
25,00
30,00
35,00
2003 2005 2010 2015 2020 2025 2030
Shar
es o
n W
orld
Rea
l GD
P
China United States EU 25
India Russian Federation Japan
Korea, Republic of Brazil
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
2003 2005 2010 2015 2020 2025 2030 2035 2040
shar
es o
n w
orld
GD
P
China Japan Italy Brazil South Africa United States France
Canada Indonesia Korea, Republic of India United Kingdom Argentina Mexico
Turkey Russian Federation Germany Australia Saudi Arabia
Figure 3a: G8 and G20 from 2003 to 2040 (2003$)
0,0
5,0
10,0
15,0
20,0
25,0
30,0
35,0
2003 2005 2010 2015 2020 2025 2030 2035 2040
Shar
es o
n wo
rld G
DP
China Japan Canada
Korea, Republic of India Russian Federation
United States EU 25
Figure 4a: the “new” G8 considering Europe-25 (2003$)
Figure 4b: Discount rates (FED-ECB), European inflation rate (HICP),
Exchange rate Euro/Dollar
0,00
1,00
2,00
3,00
4,00
5,00
6,00
7,00
gen-
99
apr-9
9
lug-9
9
ott-9
9
gen-
00
apr-0
0
lug-0
0
ott-0
0
gen-
01
apr-0
1
lug-0
1
ott-0
1
gen-
02
apr-0
2
lug-0
2
ott-0
2
gen-
03
apr-0
3
lug-0
3
ott-0
3
gen-
04
apr-0
4
lug-0
4
ott-0
4
gen-
05
apr-0
5
lug-0
5
ott-0
5
-0,10
0,10
0,30
0,50
0,70
0,90
1,10
1,30
1,50
FED Funds Rate ECB Discount Rate HICP Euro/Dollar Exchange Rate
dic-05
Figure 4c: Euro per Dollar (november 2003)
1,165
1,17
1,175
1,18
1,185
1,19
1,195
1,2
1,205
1,21
1,40 1,30 1,20 1,10 1,00 Variations with respect to €/$ to
1,40
€/$ ratio
2005
GDP growth rate -0,05 0,40 0,86 1,32 1,77 1,82
Deficit/GDP ratio 3,98 3,79 3,59 3,39 3,17 -0,81
2006
GDP growth rate 1,22 1,54 1,89 2,28 2,72 1,50
Deficit/GDP ratio 3,93 3,53 3,10 2,65 2,17 -1,76
2007
GDP growth rate 1,62 ,87 2,12 2,40 2,69 1,07
Deficit/GDP ratio 3,71 3,20 2,66 2,10 1,50 -2,21
2008
GDP growth rate 1,57 1,80 2,04 2,30 2,59 1,02
Deficit/GDP ratio 3,51 2,91 2,28 1,62 0,92 -2,59
TABLE 1 - The effect of the super euro on growth and the deficitWith variations of the Euro/Dollar ratio determined by the reduction in interest rates
BASE SIMULATION
Figure 5a - US Current Account (% of GDP)BASE SIMULATION
-7
-6
-5
-4
-3
-2
-1
0
2002 2003 2004 2005 2006 2007 2008 2009
Figure 5b - US Current Account ($ BN)BASE SIMULATION
-900
-800
-700
-600
-500
-400
-300
-200
-100
0
2002 2003 2004 2005 2006 2007 2008 2009
Figure 6 - Yuan per DollarBASE SIMULATION
6
6,5
7
7,5
8
8,5
2004 2005 2006 2007 2008 2009
Figure 7 - GDP growth rateBASE SIMULATION
0
1
2
3
4
5
6
7
8
9
10
2005 2006 2007 2008 2009
United States Euro area China
Africa Latin America India
Figure 8 - US Foreign debt($ BN)
0
500
1000
1500
2000
2500
3000
3500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Figure 9 - Major foreign holders of Trasury securities
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
% s
ha
re
Japan Mainland ChinaUK Caribeean Banking CenterTaiwan
US DOLLAR
IPER DEVALUATION
Figure 10 - Dollar per Euro
0
0,5
1
1,5
2
2,5
2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 11 - Yuan per Dollar
0
2
4
6
8
10
2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 12 - Yen per Dollar
0
20
40
60
80
100
120
2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 13 - US GDP growth rates
0
2
4
6
8
10
2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 14a - US Current Account (% of GDP)
-7
-6
-5
-4
-3
-2
-1
0
2002 2003 2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 14b - US Current Account ($ BN)
-900
-800
-700
-600
-500
-400
-300
-200
-100
0
2002 2003 2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 14c - US Foreign debt ($ BN)
0
500
1000
1500
2000
2500
3000
3500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 14d - US CPI
01
23
45
67
2004 2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 15 - China GDP growth rates
0
2
4
6
8
10
2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 16 - Euro area GDP growth rates
0
2
4
6
8
10
2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 17 - Africa GDP growth Rates
0
2
4
6
8
10
2005 2006 2007 2008 2009
BASE $ IPDEVAL
Figure 18 - Latin America GDP growth rates
-2
0
2
4
6
8
10
2005 2006 2007 2008 2009
BASE $ IPDEVAL
EUROPEAN DOMESTIC DEMAND PUSH
PLUS EURO DEVALUATION
Figure 19 - Dollar per Euro
-0,2
0,1
0,4
0,7
1
1,3
1,6
2004 2005 2006 2007 2008 2009
BASE EDD PUSH EDD PUSH + EURO DEVAL
Figure 20 - Euro Area GDP growth rates
0
1
2
3
4
5
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 21 - Germany's GDP growth rates
-1-0,5
00,5
11,5
22,5
33,5
44,5
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 22 - France's GDP growth rates
-1
-0,5
0
0,5
1
1,5
2
2,5
3
3,5
4
4,5
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 23 - Italy's GDP growth rates
-1-0,5
00,5
11,5
22,5
33,5
44,5
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 24a - Germany Deficit/GDP
-5
-4
-3
-2
-1
0
1
2
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 24b - CPI Germany
0
1
2
3
4
5
6
2005 2006 2007 2008 2009
BASE EDD PUSH EDD PUSH + EURODEVAL+ EURO DEVAL
Figure 25a - France Deficit/GDP
-3,5
-3
-2,5
-2
-1,5
-1
-0,5
0
0,5
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 25b - CPI France
0
0,5
1
1,5
2
2,5
3
3,5
2005 2006 2007 2008 2009
BASE EDD PUSH EDD PUSH + EURODEVAL+ EURO DEVAL
Figure 26a - Italy Deficit/GDP
-5
-4
-3
-2
-1
0
2005 2006 2007 2008 2009
BASE EDD PUSH + EURO DEVAL EDD PUSH
Figure 26b - CPI Italy
0
1
2
3
4
5
6
2005 2006 2007 2008 2009
BASE EDD PUSH EDD PUSH + EURODEVAL+ EURO DEVAL
Figure 27 - US Current Account (% of GDP)
-7
-6
-5
-4
-3
-2
-1
0
2002 2003 2004 2005 2006 2007 2008 2009
BASE EDD PUSH +EURO DEVAL EDD PUSH
EXCHANGE RATE ADJUSTMENT
PLUS CHINESE DOMESTIC PUSH
Figure 28 - Yuan per Dollar
0
1
2
3
4
5
6
7
8
9
2004 2005 2006 2007 2008 2009
BASE ERA
Figure 29 - Dollar per Euro
0
0,2
0,4
0,6
0,8
1
1,2
1,4
1,6
2004 2005 2006 2007 2008
BASE ERA
Figure 30 - Yen per Dollar
0
20
40
60
80
100
120
2004 2005 2006 2007 2008 2009
BASE ERA
Figure 31 - US GDP growth rate
0
1
2
3
4
5
6
2005 2006 2007 2008 2009
BASE ERA + CDP ERA
Figure 32 - US Current Account (% of GDP)
-7
-6
-5
-4
-3
-2
-1
0
2002 2003 2004 2005 2006 2007 2008 2009
BASE ERA ERA + CDP
Figure 33 - US Foreign debt ($ BN)
0
500
1000
1500
2000
2500
3000
3500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Base ERA ERA + CDP
Figure 34 - US CPI
00,5
1
1,52
2,53
3,54
2004 2005 2006 2007 2008 2009
BASE ERA ERA + CDP
Figure 35a - Euro Area GDP growth rates
0
2
4
6
8
10
12
2005 2006 2007 2008 2009
BASE ERA ERA + CDP
Figure 35b - EURO AREA CPI
0
1
2
3
4
5
6
7
8
9
2005 2006 2007 2008 2009
BASE ERA ERA + CDP
Figure 36 - Africa GDP growth rates
0
2
4
6
8
10
12
2005 2006 2007 2008 2009
BASE ERA ERA + CDP
Figure 37 - Latin America GDP growth rates
0
2
4
6
8
10
12
2005 2006 2007 2008 2009
BASE ERA ERA + CDP
Figure 38 - China GDP growth rates
0
2
4
6
8
10
12
2005 2006 2007 2008 2009
BASE ERA ERA + CDP
