Friday, 10 May 2013

Follow Germany

There are a lot of suggestions that England should follow Germany economically. Germany is currently the backbone behind the Euro zone, so much so that it always seems to appear as though Germany is bailing out every Southern European state. How did they get to this position?

Data now available:-
RGDP [annual rate]
 2006 Q1 – 2,263,994.4 million euro
 2008 Q1 – 2,429,934.8 million euro
 2012 Q4 – 2,463,022.8 million euro

 2006 Q1 – 40.7 euro
 2008 Q1 – 42.6 euro
 2012 Q4 – 42.6 euro

 2006 Q1 – 38.94 million
 2008 Q1 – 40.25 million
 2012 Q4 – 41.71 million

Hours worked at an annual rate
 2006 Q1 – 1,428.5
 2008 Q1 – 1,417.2
 2012 Q4 – 1,385.9

Unemployment Rate
 2006 Q1 – 10.6%
 2008 Q1 – 8.0%
 2012 Q4 – 5.4%

It would be a mistake to assume that the German miracle was an illusion due to slow productivity growth. The welfare loss to a society from a 5% RGDP shock is much greater if 5% of workers lose their jobs, as compared to all workers staying employed, but working 5% less hard.

One of the reasons that our unemployment drops during this period is the incredible rise of temporary jobs, effectively creating two jobs from one. This has not helped our balance of payments. Do we have to wait six years for this to change? Of course not, we can vote in 2015, that is if people can be bothered too.

No comments:

Post a Comment