GIC’s 24th Annual Monetary And Trade Conference
Prof. Mario Baldassarri Vice Minister of Economy and Finance, Italy University of Rome, “La Sapienza”, Rome - Italy
The American Cicada, the Chinese Ant and the European Sleeping Beauty: What is the Global Economy? …In any case, wake up Europe!
Figure 1 - Terms of trade betwe en dev eloping non-oil producing countries and industrialized countries (1953-2006) 110
105
100
95
90
85
80
` y = -0,5701x + 95,68 R2 = 0,7564
75
70
65
2005
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
1953
60
Figure 2 - Terms of trade between oil producing developing countries and industrialized countries (1953-2006)
860
760
660 y = 8,7901x + 44,395 R2 = 0,4594
560
460 `
360
260
160
2005
2001
1997
1993
1989
1985
1981
1977
1973
1969
1965
1961
1957
1953
60
Wolrd GDP Share s (2003)
45%
55%
north south of w orld
Share of World Population (2003)
15% north south of w orld 85%
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
Wolrd GDP Shares 2003
26%
28%
Asian Countries Europe-25 USA
23%
23%
Other countries
Wolrd GDP Shares 2030
Asian Countries
23% 50%
Europe-25 USA
15%
Other countries 12%
Map 5: Word with continents weighted by Real GDP, projections for 2015
Map 6: Word with continents weighted by Real GDP, projections for 2030
World GDP Shares (2030)
40%
USA, China, India 60%
Other Countries
World PopulationShares (2030)
40% 60%
USA, China, India Other Countries
Figure 3 - G8 and G20 from 2003 to 2030 (Actual G8 from 47% to 29%; China from 13% to 34%) 35,00
Shares on World Real GDP
30,00
25,00
20,00
15,00
10,00
5,00
0,00 2003 China Japan Italy Brazil South Africa
2005
2010 United States France Canada Indonesia Korea, Republic of
2015
2020 India United Kingdom Argentina Mexico Turkey
2025
2030 Russian Federation Germany Australia Saudi Arabia
Figure 4: "New" G8, considering Europe-25 35,00 30,00
Shares on World Real GDP
25,00 20,00 15,00 10,00 5,00 0,00 2003
2005
2010
2015
2020
2025
China
United States
EU 25
India
Russian Federation
Japan
Korea, Republic of
Brazil
2030
TABLE 1 - The effect of the super euro on growth and the deficit With variations of the Euro/Dollar ratio determined by the reduction in interest rates â‚Ź/$ ratio 1,40
2 0 0 5
1,30
1,20
1,10
1,00
Variations with respect to â‚Ź/$ to 1,40
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
2 0 0 6
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
2 0 0 7
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
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
2 0 0 8
BASE SIMULATION
Figure 5a - US Current Account (% of GDP) BASE SIMULATION
0 2002 -1 -2 -3 -4 -5 -6 -7
2003
2004
2005
2006
2007
2008
2009
Figure 5b - US Current Account ($ BN) BASE SIMULATION
0 -100 -200 -300 -400 -500 -600 -700 -800 -900
2002
2003
2004
2005
2006
2007
2008
2009
Figure 6 - Yuan per Dollar BASE SIMULATION
8,5
8
7,5
7
6,5
6 2004
2005
2006
2007
2008
2009
Figure 7 - GDP growth rate BASE SIMULATION
10 9 8 7 6 5 4 3 2 1 0 2005
2006
2007
2008
United States
Euro area
China
Africa
Latin America
India
2009
3500
Figure 8 - US Foreign debt ($ BN)
3000 2500 2000 1500 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Figure 9 - Major foreign holders of Trasury securities 70,00 60,00
% share
50,00 40,00 30,00 20,00 10,00 0,00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Japan Mainland China UK Caribeean Banking Center Taiwan
US DOLLAR IPER DEVALUATION
Figure 10 - Dollar per Euro 2,5 2 1,5 1 0,5 0 2004
2005
2006
2007
BASE
$ IPDEVAL
2008
2009
Figure 11 - Yuan per Dollar 10 8 6 4 2 0 2004
2005
2006
2007
BASE
$ IPDEVAL
2008
2009
Figure 12 - Yen per Dollar 120 100 80 60 40 20 0 2004
2005
2006
2007
2008
BASE
$ IPDEVAL
2009
Figure 13 - US GDP growth rates
10 8 6 4 2 0 2005
2006 BASE
2007
2008 $ IPDEVAL
2009
Figure 14a - US Current Account (% of GDP) 0 -1
2002
2003
2004
2005
2006
2007
2008
-2 -3 -4 -5 -6 -7 BASE
$ IPDEVAL
2009
0 -100 -200
Figure 14b - US Current Account ($ BN) 2002 2003 2004 2005 2006 2007
-300 -400 -500 -600 -700 -800 -900 BASE
$ IPDEVAL
2008 2009
3500 3000
Figure 14c - US Foreign debt ($ BN)
2500 2000 1500 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 BASE
$ IPDEVAL
Figure 14d - US CPI 7 6 5 4 3 2 1 0 2004
2005
2006 BASE
2007
2008
$ IPDEVAL
2009
Figure 15 - China GDP growth rates 10 8 6 4 2 0 2005
2006 BASE
2007
2008 $ IPDEVAL
2009
Figure 16 - Euro area GDP growth rates 10 8 6 4 2 0 2005
2006 BASE
2007
2008 $ IPDEVAL
2009
Figure 17 - Africa GDP growth Rates 10 8 6 4 2 0 2005
2006 BASE
2007
2008 $ IPDEVAL
2009
Figure 18 - Latin America GDP growth rates 10 8 6 4 2 0 -2
2005
2006 BASE
2007
2008
$ IPDEVAL
2009
EUROPEAN DOMESTIC DEMAND PUSH PLUS EURO DEVALUATION
Figure 19 - Dollar per Euro
1,6 1,3 1 0,7 0,4 0,1 -0,2
2004 BASE
2005
2006
EDD PUSH
2007
2008
2009
EDD PUSH + EURO DEVAL
Figure 20 - Euro Area GDP growth rates 5 4 3 2 1 0 2005 BASE
2006
2007
EDD PUSH + EURO DEVAL
2008
2009 EDD PUSH
Figure 21 - Germany's GDP growth rates 4,5 4 3,5 3 2,5 2 1,5 1 0,5 0 -0,5 -1
2005
BASE
2006
2007
2008
EDD PUSH + EURO DEVAL
2009
EDD PUSH
4,5 4
Figure 22 - France's GDP growth rates
3,5 3 2,5 2 1,5 1 0,5 0 -0,5 -1
2005
BASE
2006
2007
2008
EDD PUSH + EURO DEVAL
2009
EDD PUSH
Figure 23 - Italy's GDP growth rates 4,5 4 3,5 3 2,5 2 1,5 1 0,5 0 -0,5 -1
2005 BASE
2006
2007
2008
EDD PUSH + EURO DEVAL
2009 EDD PUSH
Figure 24a - Germany Deficit/GDP 2 1 0 -1
2005
2006
2007
2008
2009
-2 -3 -4 -5 BASE
EDD PUSH + EURO DEVAL
EDD PUSH
Figure 24b - CPI Germany
6 5 4 3 2 1 0 2005 BASE
2006 EDD PUSH
2007
2008
2009
EDD PUSH + EURODEVAL+ EURO DEVAL
Figure 25a - France Deficit/GDP 0,5 0 -0,5
2005
2006
2007
2008
2009
-1 -1,5 -2 -2,5 -3 -3,5 BASE
EDD PUSH + EURO DEVAL
EDD PUSH
Figure 25b - CPI France
3,5 3 2,5 2 1,5 1 0,5 0 2005 BASE
2006 EDD PUSH
2007
2008
2009
EDD PUSH + EURODEVAL+ EURO DEVAL
Figure 26a - Italy Deficit/GDP 0 -1
2005
2006
2007
2008
2009
-2 -3 -4 -5 BASE
EDD PUSH + EURO DEVAL
EDD PUSH
Figure 26b - CPI Italy
6 5 4 3 2 1 0 2005 BASE
2006 EDD PUSH
2007
2008
2009
EDD PUSH + EURODEVAL+ EURO DEVAL
Figure 27 - US Current Account (% of GDP)
0 -1
2002
2003
2004
2005
2006
2007
2008
2009
-2 -3 -4 -5 -6 -7 BASE
EDD PUSH +EURO DEVAL
EDD PUSH
EXCHANGE RATE ADJUSTMENT PLUS CHINESE DOMESTIC PUSH
Figure 28 - Yuan per Dollar
9 8 7 6 5 4 3 2 1 0 2004
2005
2006 BASE
2007 ERA
2008
2009
Figure 29 - Dollar per Euro
1,6 1,4 1,2 1 0,8 0,6 0,4 0,2 0 2004
2005
2006 BASE
2007 ERA
2008
Figure 30 - Yen per Dollar 120 100 80 60 40 20 0 2004
2005
2006 BASE
2007 ERA
2008
2009
6
Figure 31 - US GDP growth rate
5 4 3 2 1 0
2005
2006 BASE
2007 ERA + CDP
2008 ERA
2009
Figure 32 - US Current Account (% of GDP)
0 -1
2002
2003
2004
2005
2006
2007
2008
-2 -3 -4 -5 -6 -7 BASE
ERA
ERA + CDP
2009
3500
Figure 33 - US Foreign debt ($ BN)
3000 2500 2000 1500 1000 500 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Base
ERA
ERA + CDP
Figure 34 - US CPI 4 3,5 3 2,5 2 1,5 1 0,5 0 2004
2005 BASE
2006
2007 ERA
2008 ERA + CDP
2009
Figure 35a - Euro Area GDP growth rates
12 10 8 6 4 2 0 2005
2006 BASE
2007 ERA
2008 ERA + CDP
2009
Figure 35b - EURO AREA CPI 9 8 7 6 5 4 3 2 1 0 2005
2006 BASE
2007
2008
ERA
ERA + CDP
2009
Figure 36 - Africa GDP growth rates
12 10 8 6 4 2 0 2005
2006 BASE
2007 ERA
2008
2009
ERA + CDP
Figure 37 - Latin America GDP growth rates
12 10 8 6 4 2 0 2005
2006 BASE
2007 ERA
2008 ERA + CDP
2009
Figure 38 - China GDP growth rates
12 10 8 6 4 2 0 2005
2006 BASE
2007 ERA
2008
2009
ERA + CDP