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Business cycles in France

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  1. Introduction
  2. Domestic environment
    1. Household expectations
    2. Consumer opinion (balance of responses seasonally adjusted)
  3. Business expectations
    1. Business tendency: Balances of opinions seasonally adjusted
  4. Other factors
    1. Public policies
    2. Labor and capital
    3. Prices, wage and interest rates
  5. Alternative forecasts
    1. Forecasts about the French economy Credit Agricole
  6. Conclusion

The INSEE released one of the most concerning figures about the French economic environment: the opinion of the households has never been so low since 1987. In fact, tightening credit conditions, higher oil and primary goods prices, and the American financial crisis are undermining the mood of consumers. Despite this, concerning uncertainty, French growth is still a reality, thanks to the exports that still exist and to the increasing capacity utilization of firms. But, the French economy also depends on external factors as the consequences of the supreme crisis, the worrying health of the US demand. Those two aspects of the French economy make economic forecasts vary from one institution to another and from banks to public organizations. We can try to explain the way those figures have been computed and the benefit of those various calculation methods. We should also try to link those methods to the main economic theories and try to analyze the significance of the figures through those theories before drawing any conclusion about the future condition of the French economic health.

[...] Champ: France métropolitaine et Dom. Source: Insee, Comptes nationaux base 2000. Another explanation for this decreasing unemployment rate could come from the Keynesian theory. In fact, French households keep on consuming quite a lot compared to other developed countries and this relatively high demand is boosting the industry and therefore, the employment rate. This explanation could be valid all the more as it could justify the fact that unemployment is decreasing more slowly, following the consumption rate of households and their skepticism regarding the economic environment. [...]

[...] But, according to the Credit Agricole, those policies are only ?short?term activity stimulations? aimed at spurring the demand, in a rather Keynesian approach. According to them, the government should try to tackle both issues; of efficient use of the resources and production of higher volumes. In other words, the economic growth could also be spurred through more ?classic? policies, by increasing the supply more than providing the people with the means of consuming more. Labor and Capital Those figures are almost the same in any economic research and forecasts (INSEE, BNP, CA) and the slight variation must be due to the variable used to release those figures. [...]

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