Micro and Macro: The Economic Divide

Running head: MACROECONOMICS
Macroeconomics
Name of the Student
Name of the University
Course ID

MACROECONOMICS1
Introduction
One significant economic event in the history of world economy is economic crisis
started in 2008. The economic crisis of 2007-08 caused due to depreciation in the market of
subprime mortgage of United State. Impact of the crisis was not limited to United State only
rather it spread over all other economies across the world (Hagiwara 2019). The essay discusses
impact the economic crisis of 2008 in France considering its impact on different macroeconomic
indicators (GDP, unemployment and inflation). Besides discussing impact of economic crisis on
these indicators policy recommendations are made in reference to circular flow model.
Trend in macroeconomic indicators
Gross Domestic Product
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2200
2300
2400
2500
2600
2700
2800
2900
3000
Gross Domestic Product
Year
GDP (in billion)
Figure 1: Trend in GDP of France (Pre and Post crisis period)
(Source: Data.worldbank.org. 2020)

MACROECONOMICS2
Pre-crisis (1999-2008) Post-crisis (2009-2018)
2300.00
2400.00
2500.00
2600.00
2700.00
2800.00
2475.41
2751.28
Average GDP
Period
GDP in Billion dollar
Figure 2: Comparison of average GDP of France (Pre and Post crisis period)
Figure 1 shows trend in real GDP of France from 2001 to 2008. During the pre-crisis
period GDP of France increased steadily from 2245.421 billion dollars in 1999 to 2668.76 billion
dollars in 2008. Because of the economic crisis GDP declined to 2592.08 billion dollars. GDP
however soon recovered and then began to increase steadily.
Inflation
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Inflation
Year
Rate of Inflation
Figure 3: Trend in inflation of France (Pre and Post crisis period)
(Source: Data.worldbank.org. 2020)

MACROECONOMICS3
Pre-crisis (1999-2008) Post-crisis (2009-2018)
0.00
0.50
1.00
1.50
2.00 1.77
1.02
Average Inflation Rate
Period
Rate of Inflation
Figure 4: Comparison on average inflation in France (Pre and Post crisis period)
Inflation rate of France shows a fluctuating trend. Inflation rate was around 2 percent
during the pre-crisis period (1999-2008). Price level dropped sharply immediately after the crisis
with rate of inflation being 0.09 percent in 2009. Price level though gradually recovered it again
dropped to the lowest level of 0.04 percent in 2015. The accounted inflation rate in 2018 was
1.85 percent.
Unemployment
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
6.5
8.5
10.5
12.5
Unemployment
Year
Rate of Unemployment
Figure 5: Trend in Unemployment of France (Pre and Post crisis period)
(Source: Data.worldbank.org. 2020)