2--Aggregate Demand

Charlie McGill
Dr. Quillin
Economics
4/2/2020
Macroeconomics: Aggregate Demand
Consumer Spending in Luxembourg for the Last 10 Years
Luxembourg Consumer Spending
Source: “Luxembourg Consumer Spending 2000-2019 Data: 2020-2022 Forecast: Historical.”
Business Confidence in Luxembourg in the Last 10 Years
Luxembourg Business Confidence
Source: “Luxembourg Business Confidence 1985-2020 Data: 2021-2022 Forecast: Calendar.”
Government Spending in Luxembourg in the Last 10 Years
Luxembourg Government Spending
Source: “Luxembourg Government Spending 2000-2019 Data: 2020-2022 Forecast: Historical.”
Balance of Trade in Luxembourg for the Last 10 Years
Luxembourg Balance of Trade
Source: “Luxembourg Balance of Trade 1988-2020 Data: 2021-2022 Forecast: Calendar.”

When analyzing all of these indicators, it can be unclear at first as to how aggregate demand has changed over the past 10 years in Luxembourg. This is because of the massive fluctuations in business confidence and balance of trade. Despite those fluctuations, both business confidence and balance of trade have remained relatively stagnant over a 10 year period, while consumer spending and government spending have greatly increased. This means that the four economic indicators, on average, have increased their value in the last decade. Because aggregate demand is determined by these indicators, we can reasonably assume that AD has increased in the past decade. 
    The relationship between Real GDP and aggregate demand is a very simple one: when aggregate demand increases, Real GDP follows suit. This has been proven once again in Luxembourg. Real GDP has increased by around $15 billion while aggregate demand has been steadily rising. In my past blog, I said that Luxembourg will enter a recession in the 2020’s. When this happens, I will be very interested to see how the relationship between Real GDP and aggregate demand is affected.
Works Cited
“Luxembourg Balance of Trade 1988-2020 Data: 2021-2022 Forecast: Calendar.” Luxembourg
Balance of Trade | 1988-2020 Data | 2021-2022 Forecast | Calendar, 2020,
tradingeconomics.com/luxembourg/balance-of-trade.

“Luxembourg Business Confidence 1985-2020 Data: 2021-2022 Forecast: Calendar.”
Luxembourg Business Confidence | 1985-2020 Data | 2021-2022 Forecast | Calendar,
2020, tradingeconomics.com/luxembourg/business-confidence.

“Luxembourg Consumer Spending 2000-2019 Data: 2020-2022 Forecast: Historical.”
Luxembourg Consumer Spending | 2000-2019 Data | 2020-2022 Forecast | Historical,
2020, tradingeconomics.com/luxembourg/consumer-spending.

“Luxembourg Government Spending 2000-2019 Data: 2020-2022 Forecast: Historical.”
Luxembourg Government Spending | 2000-2019 Data | 2020-2022 Forecast | Historical,
2020, tradingeconomics.com/luxembourg/government-spending.



Comments

  1. Dr. Q April 13, 2020 at 4:12 AM

    What are the units in each of your graphs? Also, you do not need to give separate citations each time you are citing a database source; One will do.

    ReplyDelete

Post a Comment

Popular posts from this blog

1--The Level of Overall Economic Activity

Image
Real GDP for the Last 10 Years* Real GDP Per Capita for the Last 10 Years* Real GDP Growth Per Year for the Last 10 Years 2006: 49.60 billion USD 2008: $108,577.35 2008: -1.3% growth 2007: 53.74 billion USD  2009: $101,939.62 2009: -4.4% growth 2008: 53.06 billion USD 2010: $104,965.30 2010: 4.9% growth 2009: 50.74 billion USD 2011: $105,264.75 2011: 2.5% growth 2010: 53.21 billion USD 2012: $102,404.61 2012: -0.4% growth 2011: 54.56 billion USD 2013: $103,721.75 2013: 3.7% growth 2012: 54.37 billion USD 2014: $105,658.52 2014: 4.3% growth 2013: 56.36 billion USD 2015: $107,235.27 2015: 3.9% growth 2014: 59.61 billion USD 2016: $107,479.51 2016: 2.4% growth 2015: 61.32 billion USD 2017: $106,519.59 2017: 1.5% growth 2016: 63.21 billion USD 2018: $107.243.23 2018: 2.6% growth *Source: “Real GDP for the Last 10 Years” **Source: “Real GDP Per Capita for the Last 10 Years” ***Source: “Real G...
Read more

Luxembourg and the WTO

    For Luxembourg, a minuscule country in size and influence in the World Trade Organization, their relationship with the WTO has been mostly non-consequential. This can be seen immediately through a few telling statistics. A WTO report of Luxembourg's trade relations details the following (Luxembourg): 77.5% of merchandise exports go to European union. 77.1% of merchandise imports come from European union. 74.6% of commercial services exports go to EU. 65.4% of commercial services imports come from EU.  What this trade profile says, in effect, is that without membership in the WTO, Luxembourg would maintain their most robust trading parter, since they are a member state of the EU, and any losses in trade could be easily made up through EU trade agreements with non-member states. This isn't to say that Luxembourg's membership has been detrimental to their macroeconomic trade; it simply has not moved the needle all that much.      With that being ...
Read more