Macroeconomics Eco111 Final Project

Macroeconomics ECO 111 – Final Project

A Comparison of Economies – The United Kingdom and the Russian Federation

2003 – 2012

In an address before the Canadian Parliament in Ottawa in 1961, President John F. Kennedy said in part “Geography has made us neighbors. History has made us friends. Economics has made us partners. And necessity has made us allies…” (Kennedy, 1961) Although President Kennedy was referring to Canada in his speech, what resonates in his quote more than 50 years later is that geography still makes some nations neighbors, friends (some more than others), but economics has made virtually all nations partners as a result of globalization and necessity. The success of a nation’s economy depends on many factors and here, we compare those factors and the outcomes.

The United Kingdom and the Russian Federation were the chosen economies to compare for a variety of reasons. Both are members of the G20 which was formed in 1999 in response to the global financial crisis. This group consists of central bank governors and finance ministers from nineteen of the world’s largest economies and the European Union. Their mission is to promote economic development and growth around the world. (investopedia.com, 2014) In 2013, the UK ranked sixth in terms of GDP, has a population of about 64 million, a well-established legal and judiciary system that protects private property rights, and a stable political system with relatively low government corruption. As a percent of GDP, health expenditures are 9.3% and education 6.2%. Literacy is 99% and life expectancy is 80.42 years. Comparatively, Russia ranked eighth in terms of GDP, has a population more than twice the size of the UK at about 142 million, government corruption is prevalent, the judiciary is weak against political pressure, and the rule of law is weak relative to the protection of property rights. As a percent of GDP, health expenditures are 6.2% and education is 4.1%. Literacy is 99.7%...