EHC12 Macroeconomics Blog

 Netherlands Changes in SRAS and LRAS Birth Rate: The birth rate in the netherlands is currently decreasing a little bit every year. From 2016 to 2020, the birth rate was 1.66%, 1.62%, 1.59%, 1.57%, and 1.55%, respectfully. This is showing a slight decrease every year, meaning that the future workforce is getting smaller and smaller. This would shift the LRAS curve to the left because a decrease in the birth rate, will cause a decreased amount of labor, meaning there will be less people to do work. This would affect the LRAS and not the SRAS because the amount of people in the labor force is a more long term effect, than short run, especially since it won't naturally change super quickly.  Education:  In the Netherlands 79.38% of people in the labor force have advanced education as of 2021. In 2020 it was 80.49%. From 2016 to 2019 the percentage stayed around 80%. The drop in the amount of people with advanced education would move the LRAS curve to the left. It shifts the...

     Germany has faced a sharp decline in economic growth accompanying the COVID-19 pandemic and the War in Ukraine. Germany is expected to grow by 1.2% in 2022 as opposed to a growth rate of 2.9% in 2021 and these numbers are expected to decrease in the coming years (IMF). Many anticipate that the economy will further plummet due to decreases in funding for education services, a decline in natural gas supplies, and an overall increase in production costs, all together shifting their LRAS curve to the left.      The German economy has always remained highly reliant on Russian gas, and the latest squeeze on energy supply, as a result of the war in Ukraine, has largely impacted their economy. The shutoff has reduced GDP by almost 3% next year and raise inflation significantly (World Economic Form). Moreover, A complete halt to Russia gas exports could cost Germany 193 billion euros in economic losses (Eckert). This would hit their glass and iron and stee...

    Spain is currently in somewhat of an economic crisis. The problem is that inflation is up 10.5% on the year. As a result of this, prices are going up. Energy bills cost 70% more than the start of the year. This is a quantitative problem as there are now more people competing for a smaller supply. This is a result of the collective Western response to the invasion of Ukraine, wherein many countries will no longer conduct business with Russia. Therefore, taking away Europe's largest energy source creates problems in the supply chain.      On the opposite side though, Spain is having a somewhat-positive, somewhat-negative in the price of short term accommodation (AirBNB, hotels, etc). The price has jumped up, at 42% more on the coast and 17% more in cities throughout the country. The reason for this is twofold. Rise in demand and rise in costs. There are now more travelers looking to enter the country than there were last year by a fairly large margin. The...

 Potential Changes in LRAS and SRAS in Saudi Arabia