Macroeconomics and Imbalances ---------------------------The field of economics known as macroeconomics focuses on the behaviors of a nat ional economy, or a regional

economy, as a whole. Macroeconomics is a very gener al field that concerns itself primarily with large scale indicators, such as une mployment rates, and with the creation of models meant to explain relationships between those indicators. Macroeconomics is also considered the complement to mi croeconomics, which studies the actions of individuals rather than larger scales . Macroeconomics deals with totals or aggregates: the total amount for the economy as a whole. Other aggregates, apart from the six above, are: total wealth, mone y, income, and business investment; the exchange rate is a single price which ho wever affects the aggregate economy. The world today is facing numerous problems such as: - Oil imbalance - Income disparities - Infant Mortabilites - Narcotics - Gender imbalances All these problems have resulted from imbalances of incomes, wealth, demographic s, opportunities, information, genders, workforce, etc. By determining the magin itude, causes and effects of these imbalances, we infer about the macroeconomic scenarios. Inbalances during the 2008 recession: -----------------------------------For years we have been talking about global imbalances and how certain advanced economies (the US in particular) were building large deficits. A current account deficit is simply a measure of the difference between spending and income for a country. ... In the case of the US, consumption grew to levels that we had neve r seen before. Imbalances in Consumption: ------------------------The US, and to a much smaller extent the UK, have seen consumption increasing at rates much faster than GDP for the last two decades. The macroeconomic indicato r to determine the effect are: - Lower taxes (current or future) that increase disposable income - Expectations of larger future income (through faster productivity growth - Related to the previous one, expectations of more productive investment which reduces the need to save and invest to generate the same amount of future income - A demographic transition that makes the future (income or wealth) look better an the present. Imbalances in Demographics: -------------------------The imbalaces caused to due ageing populations are creating serious impact on th e world economic scenario. Experts in the West have already started to express a nxiety for the future effects of the imbalance. The macroeconomic factors that p rovide an insight into the causes and effects of imbalances due to demographic p opulation are: Changes in dependency ratio Aggregate government spending on pension claims and health schemes Aggregate changes in wages Changes Effects on inflation

th