WORLD ECONOMICS

-> micro
-> macro
- OECD:
- developed countries
- located in Paris
- 2015 world economy would shrank 3%, 2014 WE 33%
- RO: 3,5-4 up, EU 1,6, USA 2,4
- China: grows 6,7-7 % , it was above 10% => the rest of the countries cannot
compensate
- GDP
- GNP = GDP +/- E (export) ->compensate
- PPP: Purchasing Power Parity (money does not have the same value everywhere)
1. GDP (W.A.GDP) - it is not an indicator of wealth , GDP/ capita (OUTPUT)
ex. TRUST FUND - investment vehicle
2. DEMOGRAPHICS & ECONOMICS: ASSET/LIABILITY
3. WEALTH:
work ethics
[- in economics: GENERATIONS (3-45 years) - cultural approach]
4. PRICE INDEX: - Nominal
- PPP
BIG MAC INDEX - equal all around the world
COMMODITY (= marfa)
NYMEX = m
NYSE = stocks
5. WCONOMIC FLOWS
- COMMODITY
- SERVICES (nr 1 - turism)
- FINANCIAL (money)
money is a vehicle
6. GOVERNMENTAL EDCONOMICS
- BUDGET ( a T shaped model : inputs and outputs)
- SHADOW ECONOMY (the economy which is not registered)
[ REAL ESTATE BUBBLE]

7. SALES
- aggragating
- manufacturing
- services
- strategic
8. REGIONAL & CONTINENTAL/ GLOBAL
BRICS (Brazil, Russia, India, China, South Africa)
TTP (Transatlantic Trade Partnership)
9. GROWTH & DEVELOPMENT
10. GEOECONOMICS & GEOPOLITICS

2nd course
- consists of 2 layers:
-> microeconomics (profit)- individuals making economy work
-> macroeconomics (increasing output) - it cannot happen without some input from the
government; states making economy work
- Economics:( greek) - Econ. Policy: science of economic life, the science of producing and
consuming
- Aproaches: obj. / subj.
- Political Economics: subjective
MICROECONOMICS:
1. PROPERTY: issue between people
-> individual property
-> group

- in real life these go together, business union

-> social
2. COMMODITY: : it is the output that is dedicated to exchange with other commodities
liquidity: money
- everything is for sale
- LABOUR
3. MARKET
- price and quantity
4. COMPETITION: makes market work for the benefit of the consumer
(- one supplier: ex. security, nuclear energy)
5. FIRMS/ COMPANIES/ CONOMIC UNITS

1) individual -> P.F.A.

2) associated -> LTD/ SRL SA/INC - shares
3) Public companies S.N.C.F.R. (railroad)
6. FINANCE: all the markets have alternatives
- money
- value paper (I.O.U.)
- assets (ex. gold; sth valuable)
BANKS/ PENSION FUNDS (it was introduced in Europe by Otto von Bismark) - Public/ Private/
INSURANCE COMPANY/ TRUST FUNDS
7. FACTORS:
- nature
- labour
- capital
- in order to produce thay have to be mixed
8. PRICE = COST + PROFIT
depreciation(=amortizare)
Pretzel
(1 RON= 1 RON) ZERO
P<C dumping
9. LABOUR MARKET/ SALARY
- the only market that places the selling after paying money
- Revenue 100%
-> salary 80%
-> profit
-> rent
-> interest
-> dividends (profits attached to shares)

[ SME (joint/shared)]

3rd course
micro
MACRO
Constitution

1. National economy - a system put in place during history, benchmark, level of development
-> GDP - aggravated sum
-> GNP = GDP +/- exp.
W.A.P. =sum of GDP
development level -levelgdp/capita, industrial gdp, agricultural gdp, services ( more services ->
more developed)
2. Balancing income, consumption, savings, investment
Income and spending it
Y=Consumption+Savings
Savings-> investment
C<- Government ->P
3. Growth(of GDP) and development
Ro - 3,4%P ( 7%)
EU - 2% (3-4%).

Quantitative

CH - 7,7 % (10%)
-> confidence
Development- Qualitative
HDI
4. Economic cycles
- snake pattern (upward and downward tendency)
Interest rate
100 ron= 2%
Crisis->5%
->0,5% *
5. Economic Equilibrium
Consumption vs Savings
Agriculture vs Industry
Services vs Industry
6. Inflation
7. Unemployment socioeconomic feature 7%

4th course
State (Government) and economy:
- expression of the executive people

- left oriented government - right oriented government - idea of competition, of teh best fitted for the economy should
win
-> taxation system:
L.O.G: more tax
R.O.G: less tax
Government: - Taxing (finance)
- External -> affrimative action
- Social economics (mandatory educaton, retirement, etc.) - compromise between
spending money on socal issues instead of letting the people pay
- government as an economic player (education, health, safety)
Macro / Global
1. micro -> company/ firm
2. mesa -> brunch (educatio, oil, armed forces)
3. MACRO -> National economies
4. International economy - Continental (NAFTA)
- BENELUX
- Form
5. Global economy (aggragation of all economies) -> world market!!
- Supra/ structure -> Government, governmental institutions, law
-Structure: aggriculture+industry+services
- infrastructure

[ Samuelson, Robert Gilpin: The Challenge of Global...)

World Economy
1. Population
2. Aggriculture
3. Industry
4. Energy
5. Trade and transportation
6. MUltinationalism
7. Global outlook
[ Michael Freeman: Atlas of the W.E.]
1. Population

- Demo economics
Thomas Malthus: while population grows in exponantional way, food grows arithmethically
- demographics
- migration - immigration
- emigration
(melting pot)
- birth rate
- life-expectancy
5th course
2. Agriculture:
- EC: Agriculture, Industry, Services
- GDP ~ 150 bn E
- EU budget ~> 50% C.A.P.
- Food
- Factors ( green areas) -> WATER 70%
Iceland 500000m^3/inhabitant
Egypt 0,020m^3/inhabitant
- Trade ->
Apple 1 RON .. 2RON..... 20RON (sell it in oder to make the other cheaper)
4. Energy
- oil -> 1973 -> 1980
Barrel (120 l) -> USD
50 USD
120 l : 200=0,8 RON/l -> 5RON
OPEC/AOPEC
- coal
70-80%
- gas
- nuclear 10-15 %
- water 10-15%
- solar 5%
- wind
Natural resources -> Gold
Endowment

6. Multinational Corporation:
Firm -> International > Global
KIA
Hyundai
`50 -> `90 - the word became liberal
brand -> multinational
`90 -> clusters,

6th course:
Trade
- exhange bewtween countries - socialization
- Herodotus
- 1453: fall of Constantinapol
- medieval time: Mercatilism (understands that trading is gould and nation can be prosperous
from trading good) -> Gold! - Thomas Mann / Psysiocratism - FR. Quesany (no other value than
working and extracting from natural resources)
- free-trade theories ( 19th century)
1. Absolute advantage
-> theories of the comparative advntage; ground for globalizatin
2. Relative advantage
3. Terms of trade (TT)
4. Heckser - Ohlin - (Samuelson)
5. Competitive advantage

1. Absolute advantage:
RO
(t)

Meat

(units) Auto
Export

DE
100

200

200

100

Import

Meat Ro -------------> De
Auto

De-------------> Ro

4E -> 1t = 4000 E 10t = 40000 t ~ BMW 3 series

2. Relative advantage:
World China

RO

DE

Meat

90

70

Auto

100

90

-> expantion nof tastes => trade

Carnes Principle:1. In order that 2 nations would trade it is neccessary and sufficient to have
differencies between the producing (manufacturing) coast of the same kind of commodity which
is tradeable between those countries.
A certain country can have the interest to import a certtain commodity that is produced by that
ncountryn in order to concentrate on other fields.
2. A certain country can produce commodities at less advantageous coast with a condition that
through export it would get even better commodities that wold produce itself

Import Ban -> 1 e/ kg

Produce Ban -> 1o E
10 E < 11 E
3. Terms of trade:
GDP
- TT= DPE/DPI = sum pq exp = sum pqmp >=< 1 -> push up export
derived price of export/import
Growth
GDP>>>>>>>>>>>>
a) Export G/Ch
b) Consumption

it can always be stopped

c) Manufacturing
4. Hecksher - Ohlin -(Samuelson) (Leontieff)
- comparing the factors, not the oupput
Factors: Nature (plays a secondary role), Labour, Capital -> one of these two factors is dominant
Salary differential
Average Salary in Romania = 400E
in Germany = 2000E 5
- one of the factors tends to equaliza
- Convergence principle
EU -Goods, Services, Labour, Capital
5. Competitive advantage (Porter):
- diamonds

- 1980s- developed
- national capacity to build competitive advantage plus a mechanism of compeing internationally,
a mechanism that is triggered by the government of a specific country through dedicated policies
-> the exchange rate - national bank
-> the interest rate
->the budgetary deficit
A

Eur

1.1 <-> 1
1.5

USD

Export Import
- increasing the exchange rate stops the export
interest rate
banks
insurance
funds: medical, social, pension
Active operations (Banks really operate with you money) - different interest rates
Passive operation %. Fixed
interst rate - 2% -> as a businssman this is favoured
- 4%
the budgetary deficit
Budget
Revenues Spending -> it should be balanced, but it never is 3%
7th course
New Deal
- policy in the late 1920s as a solution for the crisis
- invest in highways, infrastructure
- the government paid
- the government trigger the economy via public expenditure

International prices:
Meat/ Auto
Ro/ Ger
-> Exogenous
a) mad cow disease - > the price of the meat goes up

X= no trade -Ro
Y = no trade - Ger
- limits of trade (break even point)
b) the price of gasoline doubles -> the price of the cars goes down
- international priices equalize

8th course
Trade policies: act of will governments introduce in order to
Free zone
1. No tax zone (free)

Custom union
x

2. Common tariff

Common market

x
x

3. Free movement of

x
x

Economic union

x
x

factors
4. Harmonic policies

SHENZEN
BENELUX
Trade (EU): Goods, Services, Capital, Labour
- WTO (GATT)
- Comercial policies:
- tariff policies
- non-tariff policies (1) - subjective, apply only to certain countries, products
- promotional
Non-tariff measures:
- they were underlined in the 19ths
1. Quantitative limitations: you cannot import or export, but a limited amount of goods
- prohibition
- import limitation
a) global
b) bilateral - commodities
- countries
- common trading agreements: agreement between the countries where the innitiate not to
import belongs to the exporter
2. Indirect limitations via price: foreign commoditioes would cost more (the govenmnet puts tax
on comodities)

- VAT (Value Added Tax) - nr 1 source of revenue for the government

Exporter -> C
Exp/ Im - > C
VAT/ Comm
- statistical taxes
- semitary taxes
- anti - dumping - compensatory
3. Government directs implicatioa
a) governmental acquisation/ purchases
b) monopoly
4. Custom and administrative policies
5. Limitation that occurs from various standards

9th course
- Custom regulations
- Trade policies
- Financial, money and capital markets
- MNCs
- Growt, sustainable growth, geopolitics/ economics

Impact equation: I =PxAxT

UN -> Kaya equation: F= Px(G/P)x(E/G)x(F/E)
F= CO2 emission
P= population
G= GDP/capita
E= energy consumption
Th. Picketty

Custom regulation:
1. custom duties - raising money (traditional way of acting)
- protectionism -> WTO: valid only for infant industries it is allowed to protect your
indutry if it's in infant years)
EU- custom union
2. Custom duties - imports

- exports
- transit
3. custom duties are - ad valorem
- specific framework (->fungible goods): sometimes is is less costeffective
- mixed taxes
GATT
Tariff - are usually assigned to a certai service
CO2 print
Block protectionism
M. Manoilescu
Entropy theory - N.G. Reegen
Promotional trading policy:
-measures taken by a certain state in order to inhence its position in the international market
1. micro
2. macro:
- budgetary measures (subventions - direct form; indirect - )
- fiscal measures (exeptions) - commodity
- manufact / producers
- financial & banking measures
- exchange measures (RON/ EUR)
- depregation
4,5 -3,5 (import)
-5,5 (export)

10th course
- Governmnets: 4 kinds of approaches
1. budgetary
2. fiscal (taxing measure_
- commodities
- manufacturor
3. financial and banking (ex. pention funds - public / private
4. exchange rate
- Trade - exports (-> premiums)
- imports (trade kept under control)

- indirect subventions

MFN (Most Favorized Nation): democratic principle of modern trade; you are supposed to offer to
all of you partners the best conditions which
RO -China (1%) [3%}
Brazil (1%)
- without it: preferances
- common wealth ( former British colonies)

Trade -> Specific commodity: MONEY

F.E.M. (Foreign Exchange Market)
- fixed exchange
- market exchange
1:1
Currencies:
1. USD
2. EUR
3. CHY
4. JPY
5. GBP
6. CHF
Money - vehicle to trasport value in two dimensions - space and time
Gold bullier system
Gold specie standard
Gold exchange system
Bretton Woods
Foreign exchange market
- SPOT
- SWAP
- FORWARD
Reserves:
1. gold
2. exchange means: currencies
valuable papers (I.O.U.)

3. assets
...
Exchange rate:
- PPP (Purchasing Power Parity)
- Big Mac index
RON = 10 =2,5 USD
USD =

= 5 USD

V
11th course
Sources of the exam: 1. class notes
2. Robert Gilpin: The Challenge of Global Economy
3. Lucin Anghel: Globarizarea afacerilor
4.
Foreign Exchange Market: market which really has a different kind of potential as the traditional
global market
F.E.M.: 4000 bn USD/ day
20000 bn/ year
virtual trade
Reserves:
- gold -> liquidity (the more liquid, the more tradable)
- currencies (Bretton Woods)
- SDR: Special Drawing Right
- ECU: European Currency Unit (main currencies of the EU)
- assests: taken as reserves - used in specific circumstances
GDP - 200 bn USD/ 2014 (N - nominal)
- 400 bn USD/ 2014 (PPP - purchasing power parity)
RON/EUR = 4,5/1
1. 5,5 / 1 - exporters, exporta re pushed forward
2. 3,5 / 1 - importers
RO PP - Revenues go up
- Prices go down
BIG MAC index
Gresham law: Bad money chaces good money out ot the marlet.
gold = printed money
-> put away, printed money became circulation money
EUR
USD
SFR
RON
BLU
PZN
Fisher formula: MV = PT
M= PT/V (S)
M - money
V - speed
P - price
T - volume of transactions
ex. 1,5 = (1,5x1)/1day
- theoretical n modern market
Capital - whatever you use in order to produce an investment
- asset
- money

- ideas
-> banks, investment funds, pension funds, insurance firm, brokers
- two formats:
- Greenfield: when an investment is generated from scratch
- Brownfield: buy a bult-in system, portfolio type of investment
[Fringe benefit]
- Stock exchange market: NYSE - trading portfolios (share of a company)
- commodity exchanges
- shares -> stocks
- all the stock are listed and indicated -> Dow-Jones
- crash! MNC