This Assignment Has 2 Parts. Part One: Analyze The Macroecon ✓ Solved

This assignment has 2 parts. Part One: Analyze the macroecon

This assignment has 2 parts. Part One: Analyze the macroeconomic status of a country and compare the United States and SPAIN. Collect the economic data outlined in the Country Analysis Matrix: Per Capita GDP; Misery Index (unemployment + inflation); GINI Index; Economic Freedom Index overall ranking; Human Development Index overall ranking; Current Account Balance; Budget Balance as % of GDP. Conduct additional research including a minimum of three readings from The Economist and provide citations for them. Complete the matrix and write a 250-word summary identifying two major economic strengths and two major weaknesses for your selected country, focusing on factors that contribute to overall performance and differences between the selected country and the United States. Part Two: Answer the following questions with a minimum of 100 words each and include references: Q1: Using the latest US International Trade In Goods And Services Report, did the trade deficit increase or decrease for the current period and year-to-date? Which exported services and goods increased or decreased and why? Q2: Regarding globalization and China: how much did China’s exports grow between 1991 and 2013? How did trade with developing countries affect US demand for skilled and blue-collar labor? What is a Border Adjustment Tax and how could it help? Would return of labor-intensive manufacturing restore blue-collar jobs given mechanization? Q3: Why might God encourage free trade instead of autarky? Q4: How could Federal Reserve interest rate hikes affect the value of the US dollar and why? Q5: What factors explain the depreciation of the US dollar from 2002 through April 2008 and its upward trend from August 2011 to present? Q6: Do trading partners less likely go to war, and how might the United Kingdom's exit from the EU affect trade and peace in Europe?

Paper For Above Instructions

Country Analysis Matrix (select metrics, latest available estimates)

Comparative Analysis and Evidence Base

This analysis draws on macroeconomic datasets (IMF, World Bank, UNDP), national statistics (BEA, Eurostat), economic freedom and inequality measures (Heritage Foundation; World Bank), and three recent readings from The Economist addressing US labor and inflation dynamics and Spain’s post-crisis recovery (The Economist, 2021–2023). The United States leads on per-capita income and HDI, reflecting higher average productivity and technological intensity (World Bank; UNDP). Spain shows stronger social equality (lower GINI) but faces higher structural unemployment and a higher misery index, reflecting labor-market rigidities and cyclical exposure (Eurostat; The Economist, 2022).

250-Word Summary for Selected Country: Spain

Spain’s economy exhibits two major strengths and two significant weaknesses. First, Spain’s resilience and diversification in services—particularly tourism, advanced manufacturing niches (automotive, aerospace), and expanding renewable-energy investment—support growth and current-account improvements (The Economist, 2022; IMF, 2023). Second, Spain’s social indicators (health, education) produce a relatively high Human Development Index and lower measured income inequality versus the United States, providing social stability and domestic consumption resilience (UNDP; World Bank). Two major weaknesses are persistent unemployment—especially youth unemployment—and relatively weak productivity in some domestic sectors. High structural unemployment raises the misery index and constrains inclusive growth, while productivity gaps versus other EU economies limit wage growth and fiscal space (Eurostat; The Economist, 2023). Spain’s growth has historically blended external demand (tourism and exports) with domestic recovery after the 2008–2013 crisis; recent structural reforms and EU recovery funds have improved competitiveness but not eliminated labor-market segmentation (The Economist, 2023). Compared with the United States, Spain has lower per-capita GDP and smaller R&D and high-tech sectors, but stronger social safety nets and less income inequality. Policy priorities to raise Spain’s long-term growth include labor-market reform to reduce segmentation, targeted productivity-enhancing investment in skills and R&D, and prudent fiscal consolidation to preserve recovery gains (IMF; European Commission).

Part Two — Selected Question Responses (summarized)

Q1: US International Trade In Goods and Services (summary): Recent BEA reports show the US merchandise trade deficit fluctuates with global demand and energy prices; in the latest reporting period the goods deficit widened while services exports (travel, financial, intellectual property services) showed mixed performance: travel rebounded post-pandemic while transportation services varied with fuel costs (BEA, 2023). Goods exports increased for capital equipment and pharmaceuticals; declines were seen in consumer goods and automotive parts—reflecting supply-chain shifts and global demand patterns (BEA; The Economist).

Q2: Globalization and China (summary): China’s exports expanded dramatically from the early 1990s through 2013—growing by multiples as China integrated into global value chains (The Economist, 2015). Trade with developing countries increased US demand for skilled labor (exporting skill-intensive services and capital goods) while importing labor-intensive manufactures reduced demand for some blue-collar occupations, pressuring wages and employment in those sectors (Autor et al.; Freakonomics discussion). A Border Adjustment Tax would tax imports and exempt exports for corporate tax purposes; proponents argued it could shift incentives, improve competitiveness, and reduce trade deficits, but practical and WTO implications complicate adoption. A return of labor-intensive manufacturing alone would not fully restore blue-collar employment because mechanization raises capital intensity and reduces labor per unit of output (Freakonomics; The Economist).

Q3–Q6 (condensed answers): Free trade is encouraged in many moral and economic traditions because specialization and comparative advantage raise overall welfare; biblical passages valuing trade echo that principle by recognizing gains from access to distant goods and efficiency. Federal Reserve rate hikes tend to strengthen the US dollar by increasing returns on dollar assets and attracting capital inflows; conversely rate cuts often weaken currency (Federal Reserve; FRED). The dollar’s depreciation from 2002–2008 reflected twin deficits, slower growth versus competitors, and risk sentiment; its appreciation since 2011 reflects relative US growth, capital flows to safe assets, and interest-rate differentials (FRED; IMF). Finally, deep trade ties can reduce incentives for conflict by creating mutual stakes in peaceful exchange (Bastiat-like logic), though politics and sovereignty concerns (e.g., Brexit) can disrupt trade arrangements: the UK’s EU exit raised frictional costs, regulatory barriers, and potential political tensions, increasing the need for diplomatic and economic management to preserve peace and trade (The Economist; WTO).

References

• The Economist. 2023. “Spain’s economy: Reinvention after the crisis.” The Economist (London).
• The Economist. 2022. “US labour market: resilience and inflation dynamics.” The Economist (London).
• The Economist. 2021. “Globalisation and supply chains: the China transformation.” The Economist (London).
• International Monetary Fund (IMF). 2023. World Economic Outlook Database. https://www.imf.org
• World Bank. 2023. World Development Indicators. https://data.worldbank.org
• United Nations Development Programme (UNDP). 2022. Human Development Report.
• U.S. Bureau of Economic Analysis (BEA). 2023. US International Trade in Goods and Services reports. https://www.bea.gov
• Eurostat. 2023. Spain macroeconomic and labor statistics. https://ec.europa.eu/eurostat
• Heritage Foundation. 2023. Index of Economic Freedom. https://www.heritage.org/index
• Federal Reserve Bank of St. Louis (FRED). 2023. Trade Weighted Dollar Index and related series. https://fred.stlouisfed.org