The World Economy of the Early 21st Century

The analysis of a country’s large aggregate numbers belongs to the branch of economics known as macroeconomics. The language of macroeconomics tends to be cumbersome for non-economists, raising a barrier that makes it difficult to convey the interesting messages that macroeconomic analysis can deliver.

This book aims to overcome this barrier by presenting, in a brief, easy-to-digest manner, some of the keys to thinking about the macroeconomic performance of countries.

"This book grew out of the sessions prepared for MBA and Executive Education courses at ESADE in the early years of the 21st century, when business managers’ growing interest in the economic analysis of countries was popping up to the surface," explains Professor Ballabriga.

The book builds on the simple idea that some of most basic questions one must ask and answer in order to assess economic performance are the same for countries as for companies. Starting from this premise, the book unfolds in two parts.

In the first part, standard business financial statements (income statement and balance sheet) are presented as an accounting framework that is useful for discussing a country’s macroeconomic performance and potential solvency problems. In the second part, the accounting framework is used to narrate the macroeconomic evolution of the world economy in the early years of the 21st century, with the 2008-2009 global financial crisis on center stage.

"This increasing interest is not surprising," says Professor Ballabriga. "It actually goes hand in hand with the intense process of economic globalization that has been taking place since the last decade of the 20th century, a process that has highlighted the role of countries as economic entities. This has made it commonplace to look at countries as economic units whose fundamentals determine their growth potential and their attractiveness as destinations for international business investment."

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