MICRO-MACRO

ECONOMICS ARGUMENTS
  The Economics
• First -the term “Economics”.
• Economy is the kind of “Social Science”.
• It determine the production, distribution & consumption of goods
and services.
• “Political Economy” WHO MAKES DECISIONS.
• In the late 19th century its known as “Economics” rather than
“Economic Science”.
• LONG HISTORY
• Aristotle, Xenophon and Chanakya (Indian) are most popular and
known as a ‘founders’ of “scientific economics”.
 1. The Introduction
Micro
Micro means “small”.
Typically, it applies to
markets where goods or
services are brought and sold.
Studies the behavior of
individuals and firms in
making decisions regarding the
allocation of limited resources.
Macro
Macro means “large”.
It’s includes national,
regional & global economies.
It’s dealing with the
performance, structure,
behavior & decision-making of
an economy as a whole, rather
than individual markets.
 2. The Difference
Micro-Economics
Microeconomics is mainly
use to study of economics at
an individual, group or
company level.
It is focuses on issues that
affect only certain kind of
groups, individuals or may be a
company.
Macro-Economics
Macroeconomics is mainly
use to study of whole thing.
Like national economy.
It is focuses on issues that
affect whole things like nation.
 1. The History
In the 20th century, one English economist,
John Maynard Keynes
published a book named ‘The General Theory of
Employment, Interest and Money’ in 1936.
That was the revolutionary thinking in the history of Economics.
And then the partition of the Economics began.
One was a continuation of the 19th century tradition, centered on the
analysis of individual decision-making in the marketplace which known then
“Micro-Economics”.
The another was the legacy of Keynes and other early 20th century thinkers
that constructed models of the entire economy to determine its systemic
properties which known then “Macro-Economics”.

 Power of state
• Major instruments
– LEGAL - institutional, ECONOMIC- taxation ,
procurements, public spendings, subsidies,
FORCE
• Major expectations
– SECURITY, WELFARE, DEVELOPMENT
 GLOBAL , REGIONAL,SECTORIAL
MACROECONOMICS

• INTERNATIONAL ORGANIZATIONS
– BilateraL and multinational treaties
• REGIONAL INSTITUTIONS
– EU, ASEAN,
 WHY government
• SOCIAL INEQUALITIES
• Market imperfections
– Monopoly
– Access to information
– Natural barriers ( natural
resources )
• Political duties
• Social duties –
redistribution of wealth
• Antimonopoly legislation
• Internal market protection
• External issues – pollution,
climat change,

EXAMPLE : GLOBAL, REGIONAL,

REGULATIONS
(eg. EU , WTO, FTAs )
 Market imperfections

• MONOPOLY-
– MARKET CONTROL
– PATENTS –IPR intellectual property rights
– Access to information
– manipulating rating agencies reports
• EXTERNALITIES
– ENVIRONMENT PROTECTION
(when decision of one person impose extra cost on
others )
 WORLD Tax revenue
Average tax revenue rose to 34.1% of
GDP last year in the OECD, a club
• .
mostly of rich countries, the highest
tax take since 2007. During the
financial crisis in 2009 the tax-to-GDP
ratio fell to a low of 32.7%. Turkey has
seen the biggest increase—5.2
percentage points since 2007, thanks
largely to higher revenues from taxes
on goods and services and social-
security contributions. But its tax take
still amounts to less than a third of its
GDP. Over the same period, France’s
tax burden has risen by 2.7 percentage
points, to a hefty 45% of GDP. That is
second only to Denmark (48.6%).
Mexico has the lowest tax take in the
OECD, with revenues equivalent to less
than a fifth of its GDP.
 TAX REVENUES
Power of state
COMPOSITION
• Major instruments
– LEGAL institutional, ECONOMIC taxation ,
procurements,
• Major expectations
– SECURITY, WELFARE, DEVELOPMENT
 MACROECONOMICS
• 1.MAJOR INDICATORS
– GDP
– INFLATION
– UNEMPLOYMENT
– CURRENT ACCOUNT (TRADE) BALANCE
– BUDGET BALANCE
– CURRENCY EXCHANGE RATE
• 2.MAJOR ISSUES – expenses and revenues
balancing
 GOVERNMENT DUTIES1
• SAFETY INTERNAL AND EXTERNAL
• WELFARE STATE –
• Health care,
• Education
• Unemployment
• SPECIAL PROGRAMMES –poverty reduction
• BUDGET BALANCE
• FISCAL POLICY
 GOVERNMENT DUTIES-2
• CO-OPERATION WITH CENTRAL BANK
– MONETARY POLICY (INFLATION)
• INTERNATIONAL TRADE BALANCE
– EXPORT-IMPORT
– CAPITAL FLOWS

• CO-OPERATION WITH SUPRANATIONAL

ORGANIZATIONS
 READING
• PETER DORMAN; MACROECONOMICS; A
Fresh Start; PUBL. Springer, 2014 WSGE
Library,
• PRINCIPLES OF ECONOMICS. 2012; publ.
PEARSON, Part III and IV; WSGE LIBRARY
• THE ECONOMIST- weekly magazine; selected
articles