How Is Government Debt Related to Unemployment and Economic Growth?

University of Manchester

14

Integrated Word/Excel Project

How is government debt related to unemployment and economic growth?

Introduction

The aim of this project is to examine the situation of world economy and its’ main characteristics in the aftermath of economic crisis. This project will focus on how government debt is related to economic growth and unemployment. The secondary objective of this project is to compare the data of world economy and European Union(EU) economy.

World economy in 2010

Data used in this project is gathered during the main years – 2009 and 2010 – of the last economic crisis. In this section, we use this data to exemplify how different economies in the world were affected by economic crisis and how well and how quickly they recovered from the hardest year – 2009 -, when the GWP(General World Product) growth was negative(-0,5%)(  World Economic Outlook IMF).

Main characteristics of world economy

After the decline in 2009, GWP increased by 4,27% in 2010 with the highest rise of 27,04% in Macao SAR, China and the lowest of -8,88% in Antigua and Barbuda. Meanwhile, the average rise of GDP in EU countries was only 1,69% but it still rose over 5% from -4,1% the year before. (IMF) Average government debt(measured in percentage of GDP) of the world countries observed(58) rose to 52,21% and in EU countries even to 65,25% with several countries exceeding the 100% mark. The rise in government debt came from budget deficit – average budget deficit of the countries observed(99) was 3,01% but in member countries of the EU it was almost twice as much(5,79%) with the deficit reaching over 10% in the most damaged countries during the economic crisis such as Greece and Ireland.

| GDP 2010(mil x2 USD) | GDP 2009(mil x2 USD) | Budgetsurplus(%) | GovernmentDebt(%) | GDPGrowth(%) |

Mean | 222047,50 | 212949,89 | -3,01% | 52,21% | 4,27% |

Median | 14103,53 | 13567,93 | -3,27% | 47,74% | 4,00% |

Standard deviation | 988836,32 | 954373,91 |...