Germany:
Germany borders nine countries such as Poland, Austria, Switzerland, and Denmark among others. It lies at latitudes of 470 and 550N and longitudes of 50n and 160E. The territories of Germany consist of 349,223km2 of land and an area of 7798km2 of water totalling to 357021km2. Furthermore, it is regarded as the most populous country in the European Union. As a country, it is made up of 16 constituencies that enjoy a moderate climate. Statistically, it is proven that it has a strong economy with a high purchasing power parity. More so the country is well developed with extensive universal health facilities and proper living standards. As an established country, it is ranked to have the 4th largest economy by nominal gross domestic product (GDP). (Davis and Steven p 20)
Australia:
On the other hand, Australia is a sovereign country that comprises of islands and mainland. As a country, it has the tenth highest per capita income and considered to be ranked 13th globally. It is economically free with quality education and an urbanized system. Geographically it lies on a latitude of 90 and 440S and longitudes of 112 and 1540E. It is regarded the smallest continent with a majority of people living in the coastal areas. As a country, it enjoys a climate that is influenced by the ocean currents with low temperatures. This paper will, therefore, explain the contrasts and comparisons between the two countries, with particular focus being on the economic indicators such as unemployment, GDP among others. Further emphasis will be on the evaluation of the financial status and some of the roles the two governments have to the economy.
Contrasts and Comparisons:
According to federal statistical records as at December 2015, Germany has a population of 82,175,700 people with a fertility rate of 1.5 making it the sixteenth populous country worldwide. More so the nation has a GDP of 1.9%, a purchasing power parity of $4.066 trillion and a per capita income of $ 49,300 from the data of 2016. On the contrary, Australia is estimated to have a population of 24,831000 people from the present data of 5th March 2018. The Australian Bureau of statistics reports that Australia has a GDP of 1.5%, purchasing power parity of $424.4 billion and per capita income of $ 48,600 from the figures of 2016. Ideally, it is said that the real growth rate of Germany is high as compared to that of Australia. (Cameron and David p52)
Unemployment Rate:
The unemployment rate in Australia is 6% higher than that Germany which lies at 4.2%. It is attributed to the differences that lie between the two countries. In Australia, the high unemployment rate is as a result of the increased number of immigrants that have altered the labor market. It has rendered most people jobless. Contrastingly, German has a well-centralized economy. There have been several efforts that have been made to regulate the unemployment threat that is posed to the country. The advancements made include reducing the working hour scheme and having a minimum working scheme among its employees. ( Eggertsson et al., p 506)
Poverty and Human Development:
However much the efforts the two countries have put in to eradicate poverty the population below the poverty line lies between 16.7% and 4% respectively. It can be attributed to the increase in the number of immigrants that has put pressure on the two governments. Despite this, the gross national savings of the two countries 27.5% (Germany) and 25.5% Australia from the 2016 data. Interestingly Australia enjoys a high human development ranking and value of 2 and 0.939 respectively as compared to Germany which is ranked as 4 with a value of 0.92. Some of the parameters that were used in the calculation of the Human development index were based on the standard of living of the people within the country with a further review on the progress by the government in improving the living conditions. (Valdez, Stephen, and Philip Molyneux p118)
The Role of the Two Governments in the Economy:
Australia's total spending has increased over the years. During the 2016-2017 financial year, it was predicted to be $451 billion an increase as a result of the revenue collected during that year. It is approximated that in 2016 its GDP was $1.2T with the value of imports being $181B and exports being $159. Majority of the exports are iron ore, coal briquettes, gold and wheat exported to China, Japan, and the United Kingdom among other countries. Most of the imports during 2016 composed of heavy trucks, refined petroleum and cars. During the year of 2016, the government had a negative trade balance, and as a result, they improved on the intellectual property laws, business environment laws and the export and import laws. It was to ensure fair competition and an integral economic system.
Germany's spending power in 2016 was approximately 44.3% which was an increase from the previous years. During the 2016-2017 year, the countries revenue increased which is an attribute of the functional commercial activities of the year. As a result, it recorded the highest trade surplus which made it have a high ranking on the global stage regarding exports. Majority of the goods and services that Germany exported were; machinery, vehicles electrical and electronic equipment among others. The exports of the year accounted 41% with extensive manufacturing industries. Most of the commodities that were imported during the year were petroleum products, automobiles natural gas and other equipment's. The significant trade partners included United States, Netherlands, and Italy among others. For this reason, it has tightened the legal laws and invested so much in research to improve the existing market. (Egger, Peter, and Marko Koethenbuerger p209)
Conclusion:
From the analysis done between Germany and Australia, it can be said that Germany has an extensive market economy as compared to Australia. It is because of the gross domestic income that was obtained in the year 2016. Furthermore, during the 2016 year, Germany suffered a positive trade balance as opposed to Australia that had a negative trade balance. It is said that the tax cut that was introduced immensely to the increased GDP. Furthermore, the constitutional laws that were made controlled the government's spending spree. It should be noted that Germany is suffering from a low level of investment as a result of the closure of the nuclear plants. The efforts aimed at cutting the power costs had increased the government's spending. Despite this directive, several efforts are being directed to change to modest forms of renewable energy. It is contrary to Australia whose economy is said to be low as a result of the external economic forces and lack of sufficient vocational training programs that have hampered the economy. As a result, the government has put in mitigating factors to improve the country's economy.
Works Cited
Egger, Peter, and Marko Koethenbuerger. "Government spending and legislative organization: Quasi-experimental evidence from Germany." American Economic Journal: Applied Economics 2.4 (2010): 200-212.
Eggertsson, Gauti B., Neil R. Mehrotra, and Lawrence H. Summers. "Secular stagnation in the open economy." American Economic Review 106.5 (2016): 503-07.
Davis, Steven J. An index of global economic policy uncertainty. No. w22740. National Bureau of Economic Research, 2016
Cameron, David R. "The expansion of the public economy: A comparative analysis." American political science review 72.4 (1978): 1243-1261.
Valdez, Stephen, and Philip Molyneux. An introduction to global financial markets. Palgrave Macmillan, 2015.
Storm, Servaas, and C. W. M. Naastepad. "Crisis and recovery in the German economy: The real lessons." Structural Change and Economic Dynamics 32 (2015): 11-24.
