dossier l2 s2 2014crl.u-paris2.fr/polelangues/documents/ang/eco/l2-handout...aggregate demand --...

Université Panthéon-Assas - Paris II

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ANGLAIS

SCIENCES ECONOMIQUES

L2

SECOND SEMESTER

BUSINESS CYCLES THE US ECONOMY

AUSTRALIA / SOUTH AFRICA

Distribution ASSAS : semaine du 3 février 2014


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INTRODUCTION

The topics for the second semester focus on macroeconomics. The skills you will acquire and develop in the second semester are:

- writing a synthesis from several documents,

- understanding interviews and business news reports,

- expressing your opinion orally in debates. NB/ Debate topics can be found on pages 7, 17, 26 and 35.

CONTENTS

Chapter 1: Business Cycles 3

In this chapter you will revise basic notions about business cycles. You will acquire the vocabulary and grammar to describe and compare them. You will also be given a step-by-step guide on how to write a synthesis and get a first opportunity to practice on the documents provided.

Chapter 2: Country files 19

- The US economy 19 - Australia 29 - South Africa 32

This chapter includes three country files. The purpose is to give you opportunities to use the notions revised in chapter 1 to analyze the current situation of some English-speaking countries. Some files will be studied in class; others will be used as homework for you to practice writing a synthesis outline in class to prepare for the mid-term test.

Useful Reminders 36 This short section contains reminders and exercises to avoid expensive errors.

ASSESSMENT Continuous Assessment (50%) Final exam

(50%) Debate Attendance, punctuality, oral participation,

homework. A 90-‐minute test including the outline of a synthesis, grammar and vocabulary will be scheduled before the mid-‐term test.

Mid-‐term Test (90 minutes. Synthesis)

90-‐minute written exam. Synthesis-‐writing 25% 25% 50%


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Chapter 1: Business Cycles 1. VOCABULARY a) Match the following words with the numbers on the graph, which shows US real gross national product from 1929 to 1952. … boom … depression … peak … recession / contraction … trough … expansion / recovery

From English for Business Studies, Ian Mackenzie b) Find accurate adverbs to describe the trends above using increase/decrease as verbs. àUse that vocabulary to make 10 sentences about GNP growth in the US between 1929 and 1952. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________


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The Shape of a Recession The New York Times Catherine Rampell October 13 2009 List the verbs used by the journalist to describe upward trends and downward trends.

A V-SHAPE RECESSION is a best-case scenario. It refers to cases when the economy

snaps back as quickly and steeply as it fell. The recession of the mid-1950s is a good

example: Output dropped for three straight quarters, but then not too long afterward

rocketed back up at rates of 8.3 percent and then 12 percent. Few economists are

predicting a V-shape this time around, since consumers and job seekers are still facing

pretty strong headwinds.

AN L-SHAPE RECESSION, also known as a “hockey stick” recession, is probably the

most worrisome of all. It means that once the economy plunges, it stays down for a long,

long time. The typical example is the Japanese economy in the 1990s, which stagnated

for a “lost decade” after an asset bubble burst. Because the current American recession

was also triggered by an asset bubble, some economists had worried that the United

States might be doomed to a fate like Japan’s. But last week’s output report has given

hope that the American economy might bounce back after all.

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Do no forget the verbs that describe flat lines and

sluggish trends !

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A W-SHAPE RECESSION also has plenty of other names, including “double-dip,” and

“roller-coaster recession.” These all refer to downturns that become upturns but then

revert to downturns again. Think of the twin recessions of the 1980s: The economy

“dipped” in 1980, appeared to recover, and then “dipped” once again. Some economists

fear that this kind of “second leg down” may be lurking behind the good news last

week.

A U-SHAPE RECESSION is somewhere between a V and an L. It describes a long,

tedious recession with a bottom that’s hard to decipher. Some economists say this could

happen if the economy stagnates. Simon Johnson, the former chief economist at

the International Monetary Fund, once compared this recession shape to a bathtub:

"You go in. You stay in. The sides are slippery. You know, maybe there’s some bumpy

stuff in the bottom, but you don’t come out of the bathtub for a long time." The sluggish

downturn of the mid-1970s was a U-shape.

Illustrations by Julian Honoré.

c) After taking a look at the article above, complete the sentences below. A typical _____________________ recession is characterized by two troughs and a short-

lived recovery in the middle. The upswing should be faster in a ________________________

recession than in a _____________________one. Finally, in an L-shaped recession, the

_____________________ is followed by a long period of stagnation: a gloomy prospect.

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Also make sure you are able to use FROM/ TO/

BY/ BACK/ accurately with the verbs you have

found.

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USEFUL NOUNS & ADJECTIVES TO DESCRIBE ECONOMIC TRENDS

Growth Contraction an economic upswing/upturn a downswing/ downturn a sluggish growth a slowdown, a slump a fast expansion a collapse, a drop a buoyant market a meltdown a bumper year (=excellent year) a full-scale/severe recession steady growth a mild recession an upward spiral a downward spiral, a tailspin a slow recovery a full-blown depression an all-time high an all-time low

a single / double-digit growth/unemployment rate

d) Read the headlines below and complete with the correct preposition or Ø. Tuesday, 10 December 2013 21:05 http://www.canadianrealestatemagazine.ca/ It's official….2013 was a bumper year ____ sales

A Slowdown _____ the economy forces India’s middle classes to put dreams on hold Guardian Weekly, Tuesday 12 November 2013

Ethiopia records double-digit economic growth _____ Gross Transformation Plan http://www.sudantribune.com/ February 2013

Thailand unexpectedly slips ____ mild recession in Q2 19/08/2013 http://www.straitstimes.com/ Inflation goes ____ 0.35% and goes ____ to lower than 6% _____ 12 months http://exame.abril.com.br/

UK RECOVERED PLASTICS MARKET REMAINS BUOYANT ____ 2013

http://www.waste-management-world.com/

Is the world approaching _______ a devastating global economic meltdown? www.businessinsider.com/


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China's economy went _____ a mild downswing in November Earlier this year, emerging-market currencies went ______ a tailspin. The economy will typically experience a downswing.

December 4, 2013 1:26 AM

More states logged ______ double-digit unemployment rates in February. South Carolina registered the second-highest _____ 11% and Oregon came _____ third. ABC News

Boost ____ exports and slight drop ____ imports sees Romania slash its trade deficit

http://www.romania-insider.com/ November 19, 2013

DEBATE TOPIC 1

« We have become an economy whose normal state is one of mild depression, whose brief episodes of prosperity occur only thanks to bubbles and unsustainable borrowing. » Paul Krugman, November 2013

Do you agree with that statement?


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2. WRITING A SYNTHESIS

What is a Synthesis?

A synthesis is a written discussion that draws on two or more sources. In writing a synthesis, you infer relationships between sources, both written and non-written.

Written Sources Essays Articles Graphs and charts

Non-written Sources Lectures Interviews

In an academic synthesis, you make explicit the relationships that you have inferred among separate sources. You will have to:

* summarize the sources

* determine the relationship between your sources

In writing a synthesis, you will need to use your sources carefully, drawing relationships based on the purpose of your essay. For example, one assignment might ask you to draw a cause-and-effect relationship between two sources, another might ask you to argue a proposition, and yet another might ask you to compare and contrast.

Keep your purpose clearly in mind. Your purpose determines which sources you research, which ones you use, which parts of them you use, at which points in the essay you use them, and in what manner you relate them to one another. The explanatory synthesis uses two or more sources to convey information about a given topic; it does not provide for the writer's opinion on the topic. You will present the facts objectively, without judgment, to help your readers better understand the topic. Your purpose is to use your sources to inform your readers.

Adapted from A Sequence for academic writing, by L. Behrens, L. J. Rosen, B. Beedles, Longman Pearson.


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DOCUMENT 1: Business Cycles

a) THE BUSINESS CYCLE

Market economies have regular fluctuations in the level of economic activity which we call the business cycle. It is convenient to think of the business cycle as having three phases. The first phase is expansion when the economy is growing along its long-term trends in employment, output, and income. But at some point the economy will overheat, and suffer rising prices and interest rates, until it reaches a turning point -- a peak -- and turns downward into a recession (the second phase). Recessions are usually brief (six to nine months) and are marked by falling employment, output, income, prices, and interest rates. Most significantly, recessions are marked by rising unemployment. The economy will hit a bottom point -- a trough -- and rebound into a recovery (the third phase). The recovery will enjoy rising employment, output, and income while unemployment will fall. The recovery will gradually slow down as the economy once again assumes its long-term growth trends, and the recovery will transform into an expansion.

b) ECONOMIC POLICY AND THE BUSINESS CYCLE

The approach to the business cycle depends upon the type of economic system. Under a communist system, there is no business cycle since all economic activities are controlled by the central planners. Indeed, this lack of a business cycle is often cited as an advantage of a command economy. Both socialist and fascist economies have a mix of market and command sectors. Again, the command sector in these economies will not have a business cycle -- while the market sector will display a cyclical activity. In a full market economy -- like the United States -- the nation can suffer extreme swings in the level of economic activity.


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The economic policies used by the government to smooth out the extreme swings of the business cycle are called contracyclical or stabilization policies, and are based on the theories of John Maynard Keynes. Writing in 1936 (the Great Depression), Keynes argued that the business cycle was due to extreme swings in the total demand for goods and services. The total demand in an economy from households, business, and government is called aggregate demand. Contracyclical policy is increasing aggregate demand in recessions and decreasing aggregate demand in overheated expansions.

In a market economy (…) the government has two types of economic policies to control aggregate demand -- fiscal policy and monetary policy. When these policies are used to stimulate the economy during a recession, it is said that the government is pursuing expansionary economic policies. And when they are used to contract the economy during an overheated expansion, it is said that the government is pursuing contractionary economic policies. Source: http://faculty.etsu.edu/hipples/fpvsmp.htm

3. DEFINITIONS (Macroeconomics, Paul Krugman and Robin Wells, Worth, 2005) Complete, using the following words:

aggregate output fiscal policy business cycle recession

depression monetary policy expansion stabilization policy

a) The ……………………….. is the short-run alternation between economic downturns,

known as recessions, and economic upturns, known as expansions.

b) A ……………………….. is a very deep and prolonged downturn.

c) A ………………………..is a period of economic downturn when output and employment are falling.

d) An ……………………….. or recovery, is a period of economic upturn when output and employment are rising.

e) ……………………….. is the economy’s total production of final goods and services for a given time period.

f) Policy efforts undertaken to reduce the severity of recessions and to rein in excessively strong expansions are called……………………….. .

g) ……………………….. is a type of stabilization policy that involves changes in the quantity of money in circulation or in the interest rate, or both. h) ……………………….. is a type of stabilization policy that involves changes in tax policy or in government spending, or both.


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DOCUMENT 2: What makes a recession a recession?

I define a recession as a period of time during which output falls and unemployment rises. But this isn't the only definition. For example, you may read in a textbook or a newspaper article that an economy is in a recession if real GDP falls for two consecutive quarters. But if you look at Table 1, you notice that during certain recessions (such as the one that began in April 1960), real output actually went up rather than down. So why was that time period labeled a recession? A lot of factors go into determining what gets labeled a recession. A group of economists at the National Bureau of Economic Research (NBER) in Cambridge, Massachusetts, gets to "officially" declare when recessions begin and end in the United States. This group has a long set of criteria that begins with falling output and rising unemployment and includes lots of other things, such as how fast factories receive new orders. Sometimes these other factors cause the NBER to feel that the economy has passed a peak and has entered a recession, even if output isn't falling.

Source: Economics for Dummies, 2nd edition, Sean Flynn

TABLE 1 The Great Depression and U.S. Recessions since 1960

Start (Month/ Year)

End (Month/ Year)

Duration (Months)

Highest Unemployment Rate

Change in Real

GDP (%) 8/1929 3/1933 43 24.9 -28.8

4/1960 2/1961 10 6.7 2.3

12/1969 11/1970 11 5.9 0.1

11/1973 3/1975 16 8.5 1.1

1/1980 7/1980 6 7.6 -0.3

6/1981 11/1982 16 9.7 -2.1

6/1990 3/1991 8 7.5 -0.9

3/2001 11/2001 8 6.0 0.5

12/2007 6/2009 18 9.9 -4.1

Source: NBER, Economic Report of the President Bureau of Labor Statistics


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4) GRAMMAR PRACTICE

a) Complete the following sentences using the Preterit (V-ED), Present Perfect (HAVE + V-ED), Past Perfect (HAD + V-ED) or Simple Present.

1. The National Bureau of Economic Research …………………….. (be) an independent

research institution which ……………………… (determine) the official dates of peaks and

troughs in U.S. business cycles.

2. At its 2010 meeting, the committee ……………………… (determine) that a trough in

business activity ……………………………. (occur) in the U.S. economy in June 2009.

3. The trough ……………………. (mark) the end of the recession that……………………..

(begin) in December 2007 and the beginning of an expansion.

4. The recession …………………….. (last) 18 months, which ………………………. (make)

it the longest of any recession since World War II.

5. Previously the longest post-war recessions ………………………… (be) those of 1973-75

and 1981-82, both of which ……………………(last) 16 months

6. In determining that a trough ……………………………(occur) in June 2009, the

committee …………….. not…………………. (conclude) that economic conditions since that

month ……………………………… (be) favourable or that the economy

……………………….. (return) to operating at normal capacity.

7. Since 1929, the American GDP …………………….. (never + contract) by more than

28.8%.

b) Use the data provided in table 1 to make two sentences with AGO, two sentences with SINCE, two with FOR, and two with DURING. If possible, try to use different tenses for each sentence. ___________________________________________________________________________

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DOCUMENT 3:

July/August 1997 ESSAY

The End of the Business Cycle? Steven Weber is Associate Professor of Political Science at the University of California at Berkeley and fellow at the Center for Advanced Study in the Behavioral Sciences.

WAVES TO RIPPLES

Western political economy since the Industrial Revolution has been a vibrant world of rapid growth and development, at least for countries in the industrial "core." But it has also been a world of continuing and sometimes enormous fluctuations in economic activity. Business cycles -- expansions and contractions across most sectors of an economy -- have come to be taken as a fact of life. But modern economies operate differently than nineteenth-century and early twentieth-century industrial economies. Changes in technology, ideology, employment, and finance, along with the globalization of production and consumption, have reduced the volatility of economic activity in the industrialized world. For both empirical and theoretical reasons, in advanced industrial economies the waves of the business cycle may be becoming more like ripples.

The dampening of the business cycle will change the global economy and undermine assumptions and arguments that political economists use to understand it. "History counsels caution," Alan Greenspan warned the Senate banking committee in February 1997, about "visions of such 'new eras' that, in the end, have proven to be a mirage." Greenspan is surely right to warn against too easily accepting that the present is fundamentally different from the past, but a growing body of evidence suggests that the world may indeed be witnessing important changes in how business cycles work.

CYCLING THROUGH HISTORY

Business cycles have been linked to big changes in international politics and economics over the last century. (…) Understanding what causes business cycles and how those causes have changed suggests that business cycles will not be as important in the future as they were in the past. (…)


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THE NEW ECONOMICS

Six facets of the modern economy contribute to the dampening of the business cycle: the globalization of production, changes in finance, the nature of employment, government policy, emerging markets, and information technology. These six factors tend to reduce transaction costs, make supply and demand more fluid, compensate for production imbalances, and smooth out growth and adjustment. There will certainly still be economic shocks, whether from natural or political events or technological change. And just as surely there will be errors in monetary policy and mistakes in business planning. Those fundamental forces of the business cycle have not gone away. They will, however, be less important in a more flexible and adaptive economy that adjusts to shocks more easily and with less propensity for sparking a new cycle.

à Look up all underlined words in the dictionary and be able to explain them in English or have a synonym for them.

à What position did Alan Greenspan hold, back in 1997? Who came after him? Who will succeed him and why is that noteworthy?

à What is the key idea in this article? How does it change the perspective on business cycles?

à Pay attention to the date of publication. Does it undermine the author’s point?

DOCUMENT 4: Shorter cycles?

Sept 12th 2011, The Economist

ECONOMISTS are pretty reluctant to forecast a recession, despite some fairly gloomy data, the damaging effect on confidence of the euro zone crisis and the message sent by ultra-low bond yields. Of course, economists are generally hopeless at predicting recessions, perhaps because no-one loves a Jeremiah. But their current reluctance may be down to timing; it just seems too soon after the last downturn.

However, a big new research note from Deutsche Bank called the Long-Term Asset Return study suggests that cycles may be getting shorter. That is because cycles were artificially long in what Deutsche dubs the "golden era" from the early 1980s to the early 2000s. (…)

Deutsche looks at the data going all the way back to 1854; the average cycle was just 56


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months and the median 44 (30 months of expansion and 14 of contraction). On the latter basis, the next contraction is due to start in December.

Some say that the creation of the Federal Reserve in 1913 made a difference to the length of the cycle. So Deutsche looked at the period from 1913 to 1982 when the "golden era" started; the average expansion during that time was 55 months and the median 49; that means the recession will be postponed to the middle of next year. A small comfort.

Indeed, if Deutsche is right then further recessions would follow in 2016 and 2020, a rather discouraging background for financial markets.

à Explain the underlined words and the highlighted expression.

à What is the key idea of this text? à Relate it to document 3.


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SYNTHESIS WRITING: A/ Read document 1 again, and note down the key information you will keep in your

synthesis.

B/ Comment on table 1 and decide which key idea(s) can be inferred from it.

C/ Study document 2: which information does it add to the other documents?

D/ Document 3: Which other important ideas about recessions and business cycles should be

used from this document and document 4?

àAfter working on all documents at home and in class, write a well-organized explanatory

synthesis using relevant information from all sources.

Follow the guidelines below and bear in mind what is written on page 8.

*Your synthesis should define and explain clearly what business cycles and recessions are.

*Make sure it is written in YOUR OWN ENGLISH, don’t copy excerpts from the document.

*Write a maximum of 350 words, using link words to clarify the structure of your synthesis.

How to Write Syntheses

Here are a few guidelines to follow that will help you organize and write your synthesis paper:

• Consider your purpose in writing. • Select and carefully read your sources. • Define the main topic of all the sources. • Decide how you will use your source material. • Develop an organizational plan. • Draft the topic sentences for the main sections. • Write the first draft of your synthesis. • Revise your synthesis and pay attention to your English.

è In defining the topic for your explanatory synthesis, base your thesis on an idea that is clearly supported in all of your sources. In the explanatory thesis, you are not looking for controversy; rather, you are looking for clarity.

è You will want to summarize your sources, but you will not use all of the information in every summary. Keep your thesis and purpose clearly in mind and use the information in your sources that best helps you achieve your purpose. Writing brief notes in the margins, underlining key words and phrases will help you better incorporate your sources into your essay.

Adapted from A Sequence for academic writing, by L. Behrens, L. J. Rosen, B. Beedles, Longman Pearson


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DEBATE TOPIC 2

« There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey.(…) It is unwise to pay too much but its worse to pay too little. »

John Ruskin

Could this quotation be applied to offshoring?

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Audio Document 1: Tax Havens

Introduction:

Tax Haven Use Costing Americans $150 Billion Per Year: Study Posted: 04/04/2013 3:15 pm EDT | Updated: 04/05/2013 5:34 am EDT The Huffington Post

Worried about the federal deficit? Then you're worried about foreign tax havens, the use of which is costing the U.S. $150 billion per year in the form of lost tax revenues, according to studies cited by a recent report from U.S. PIRG, a left-leaning consumer group. To break it down, corporations account for $90 billion of the lost revenue, and individuals make up the other $60 billion.

Offshore tax evasion has become a hot-button issue of late, after a September Senate report alleged Apple, Google and Microsoft moved profits overseas in an aim to dodge taxes. Overall, U.S. companies are now holding a record $1.9 trillion of their profits abroad, according to a recent Bloomberg report.


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Corporations aren’t the only ones keeping their money overseas, however. A Center for Public Integrity report released Wednesday found that the list of people dodging taxes through foreign havens include:

American doctors and dentists and middle-class Greek villagers as well as families and associates of long-time despots, Wall Street swindlers, Eastern European and Indonesian billionaires, Russian corporate executives, international arms dealers and a sham-director-fronted company that the European Union has labeled as a cog in Iran’s nuclear-development program.

a) Read the text and find the English terms for: Décomposer, détailler ou ventiler / représenter / compléter / un imposteur / un rouage _____________________________________________________________________

b) Explain the compound adjectives of §1, §2 and §4 in English. _______________________________________________________________________________________________________________________________________________________________________________________________________________

c) Complete the sentences below with highlighted words from the text, making grammatical changes if necessary.

- Tax evasion consists in _________________________________________________.

- People who trick money out of others are ___________________________________.

- _________________________________ should not be confused with the income tax. Listening comprehension questions:

a) What were the plans of the British government to improve its economy in 2012?

b) How much did the government put into Revenue and Customs to fight aggressive tax

avoidance?

c) Who is Nicholas Shaxson? Sum up his views on the Cayman Islands.

d) What explanations are provided for the phrase “it takes two to tango” and the term

“shenanigans”?

e) Who is Anthony Travers and what distinction does he make?


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Chapter 2 The United States

Unemployment and Inequality A/

“The Complete US Jobs Report for July in Two Big Charts,” Ritchie S. King, The Atlantic, 2 August 2013

The US economy added 162,000 jobs in July, falling short of expectations, and the unemployment rate fell to 7.4%. Here's the breakdown of employment status for all Americans age 16 and above:

http://www.theatlantic.com/business/archive/2013/08/the-complete-us-jobs-report-for-july-in-two-big-charts/278302/ à Make your own sentence with each of the two underlined items in the introduction above. à Describe the bar chart above in 7 sentences, using some of the vocabulary of a), page 18.


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B/ “CEOs Now Earn 273 Times the Average Worker's Pay—Should You Be Mad?” Jordan Weissman, The Atlantic, 27 June 2013 Thirty years ago, the average chief executive of a large public company earned less than 30-times more than the typical worker. But today they rake in between 202 and 273-times the pay, as shown in the graph below from a new Economic Policy Institute paper. (…) It turns out, CEOs aren't just pulling away from average workers; they're pulling away from the rest of the elite as well. Chief execs at large companies are now making 4.7 times what other workers in the top 0.1 percent of wage earners bring in, up from an average ratio of about 3-to-1 that prevailed through 1979.

Source: http://www.theatlantic.com/business/archive/2013/06/ceos-now-earn-273-times-the-average-workers-pay-should-you-be-mad/277284/ “What's Behind the Huge (and Growing) CEO-Worker Pay Gap?” Derek Thompson, The Atlantic, 30 April 2013 Ron Johnson, the disgraced outgoing CEO of JC Penney, made an astonishing 1,795-times the average wage and benefits of his department store workers, according to a new survey from Bloomberg. That makes JC Penney the single most unequal company in the U.S., by CEO-worker pay ratio. (…) Other companies in the "top" ten included Starbucks, Simon Property Group, CBS, and Abercrombie & Fitch.

Source: http://www.theatlantic.com/business/archive/2013/04/whats-behind-the-huge-and-growing-ceo-worker-pay-gap/275435/


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C/ “The State of America’s Middle Class in Eight Charts,” Jason M. Breslow and Evan Wexler, PBS News, 9 July 2013 For many middle-class families, the American Dream can feel as though it's slipping away. For others, it can seem lost for good. (…) Over the last several decades, the middle class has struggled to keep pace with smaller paychecks, mounting debt and shrinking opportunities for steady work. The following eight charts offer a brief snapshot: #1: Wages are down Middle class incomes have shrunk 8.5 percent since 2000, after enjoying mostly steady growth during the previous decade. In 2011, the average income for the middle 60 percent of households stood at $53,042, down from $58,009 at the start of the millennium. #2: Less income for the middle class Partly as a result of lower pay, the middle class’s share of the nation’s total income has been falling. In 1980, the middle 60 percent of households accounted for 51.7 of the country’s income. By 2011, they were less than half. Meanwhile, the top fifth of households saw their slice of the national income grow 16 percent, to 51.1 percent from 44.1 percent.

#3: Union positions are shrinking One factor behind the decline in income has been a drop-off in the number of workers earning union salaries. In 2012, the median salary for a unionized worker stood at roughly $49,000. The median pay for their non-union counterparts was just shy of $39,000. Since 1983,


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however, the share of the population belonging to a labor union has gone from one-in-five workers to just over one-in-ten.

#4: More workers stuck in part-time jobs A second factor weighing down pay is the rise in the number of Americans stuck in part-time jobs. In 2012, more than 2.5 million Americans worked part-time jobs because they could not find a full-time position, the most since 1993. #5: Fewer jobs from U.S.-based multinationals Part of the challenge for job seekers is that U.S. multinational corporations having been hiring less at home. These large, brand-name firms employ roughly a fifth of American workers, but from 1999 to 2008 they shed 2.1 million jobs in the U.S. while adding more than 2.2 million positions abroad. #6: Rising debt Predictably, the economic pressures facing the middle class have left families deeper in debt. . In 1992, the median level of debt for the middle third of families stood at $32,200. By 2010, that figure had swelled to $84,000, an increase of 161 percent. #7: Families are saving less The rise in debt has meant fewer families have the ability to put away money for things like retirement or a child’s tuition bills. In 2001, more than two-thirds of middle class families said they were able to save money in the preceding year. By 2010, that figure was below 55 percent. #8: Net worth has plunged The impact on family net worth — the amount by which assets exceed liabilities — has been painful. In 2007, median net worth peaked at $120, 600. Then came the financial crisis, which pushed millions of Americans into joblessness and home foreclosure. By 2010, net worth had plummeted 36 percent, to $77,300.


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Source (and for more graphs): http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/two-american-families/the-state-of-americas-middle-class-in-eight-charts/ à Research the underlined verbs in the B. and C. sections above and give a synonym for each. à Sum up the key ideas in these sections in your own words; make around 10 sentences and use link words.

***


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Audio Document 2: America Tries to Keep Jobs at Home

Listening comprehension questions: Business News with Tania Higgins 3’05 to 5’00

1. What Strategy could help American manufacturers keep jobs at home? 2. Which company is famous for adopting it and what are its key features? 3. Who is Jim D’Addario? 4. What are his views on that matter? 5. Who is Peter Morici and what does he have to say? 6. What is the second comment made by Jim D’Addario?

*** “Detroit’s bankruptcy: Can Motown be mended?” The Economist, 27 July 2013 Larry Edwards sits patiently in his wheelchair outside City Hall, waiting for a lift home. He worked as a gardener at Detroit’s Belle Isle Park between 1988 and 2011. That was before a knee injury, and then a stroke, forced him to retire. He remembers how beautiful the island was before people started to move out of town and the crooked politicians arrived. Mr Edwards will be 50 in December. The city already pays one-third of his full pension. He says that, since his pension is protected by a contract, he isn’t worried about the city’s bankruptcy. But he should be. By filing for Chapter 9 on July 18th, Detroit sought protection from all its creditors, including pensioners like Mr Edwards. Nothing will change for the next six months. But Kevyn Orr, the emergency manager appointed by the governor of Michigan, says future and present retirees will see cuts to the unfunded portions of their pensions. Health-care benefits are also likely to be squeezed. Detroit is the largest American city ever to file for bankruptcy. Its long-term debts are estimated at $18.2 billion, or $27,000 for each resident. Of this, about $9.2 billion is in unfunded retirement benefits. Since 2008 the city has spent around $100m more each year than it has brought in. Recent attempts to fix its finances have been thwarted by a feeble economy, a shrinking population and rapidly increasing legacy costs. Property-tax revenues have declined by 20% since 2008, and income tax by 30% since 2002. The crisis has been brewing for decades. Fifty years ago the city was rich. [Detroit-based] GM, Ford and Chrysler cranked out nearly all the cars sold in America. Detroit was home to


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1.8m people. Today only 700,000 remain. Many are poor and poorly educated—82% have no more than a high-school diploma. The city sprawls over an unmanageable 140 square miles (enough to swallow Boston, San Francisco and Manhattan). Delivering services to barely-populated neighbourhoods would be hard even if the city government were well-run, which it is not. Global economic shifts did not help—Detroit’s Big Three have struggled to compete with foreign carmakers. But the big problem is that Motown has seen a “perfect storm of mistakes at every level”, says Jennifer Bradley of the Brookings Institution, a think-tank. Its leaders ran up debts that a shrinking population could never pay. Those debts forced the city to raise taxes and cut services. That made Detroit a less appealing place to live, causing the population to shrink even more. Moving to the affluent (and politically separate) suburbs is easy, so many people have. Only 30% of the jobs within the city are held by residents, and 61% of Detroiters who work do so outside the city, according to Bruce Katz, also of Brookings. (…) Detroit’s future depends on the deal Mr Orr can cut. He argues that, if the city is to recover, it must invest $1.25 billion in restoring services such as the police and firefighters, remedying urban blight and modernising the city’s decrepit IT systems. Neither the state nor the federal government has offered a bailout. Mr Orr says Detroit must solve its own problems. Source: http://www.economist.com/news/united-states/21582285-americas-biggest-ever-city-bankruptcy-starts-roll-can-motown-be-mended

à Why did the journalist choose to focus on Detroit? Why is this city also called Motown? What is the name of the area this city is part of? à Find information about Chapters 9 and 11 of the US Bankruptcy Code. à Research the underlined vocabulary items. à Fill in the grid below

Current financial situation in Detroit

Causes Consequences


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SYNTHESIS WRITING: àAfter working on all documents at home and in class, write a well-organized explanatory

synthesis using relevant information from all sources. Follow the guidelines below and bear in

mind what is written on pages 8 and 16.

*Your synthesis should give a clear overview of the current challenges the US economy is

facing.

*Make sure it is written in YOUR OWN ENGLISH, don’t copy excerpts from the document.

*Write a maximum of 400 words, using link words to clarify the structure of your synthesis.

The information in audio document 2 should NOT BE INCLUDED IN your synthesis.

DEBATE TOPICS 3 & 4

« For globalization to work for America, it must work for working people. We should measure the success of our economy by the breadth1 of our middle class, and the scope of opportunity offered to the poorest child to climb into that middle class. »

John J. Sweeney

Is that view of globalization too restrictive?

***

« The lack of monetary discipline has become a hallmark2 of unfettered3 globalization. Central banks have failed to provide a stable underpinning4 to world financial markets and to an increasingly asset-dependent global economy. » Stephen S. Roach

Do you agree with that criticism of globalization?

1 width, scope or size. 2 sure sign, distinctive feature. 3 unchecked, free. 4 basis, foundation.


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Audio Document 3 : Business News / April 2012

Listening comprehension questions: a) Relate the first news item to the following figures: $ 26 billion / 50%.

b) What did President Obama obtain from the country’s five top banks? Note: Foreclosure is the process of reclaiming title to property that has been sold under the terms of a mortgage loan, and for which the borrower has ceased to make payments. http://homeguides.sfgate.com/

c) Which news and background information do we hear about Botswana?

d) Give the two reasons why Australian wine was an ailing industry in 2012.

e) Quote a figure in relation to the news item.

f) Why is it a “double whammy” (= a double blow) for producers?

Follow-up : Diamonds in Southern Africa : -ING or -ED ?

à Read the article below and choose the correct ending for the underlined verbs.

South African diamonds languish in the rough

14 June 2013 Chantelle Benjamin The Mail & Guardian

De Beers, which controls 40% of the world's diamonds by value produc_____, has mov____ all of its sort__________ and diamond trad_______ from London to Gaborone.

As South Africa's contributions to the world's diamond trove continue to dwindle it is impossible not to contrast its fortunes with those of its neighbour, Botswana. Botswana achieved this by complet______ a sales agreement with De Beers that gives the company the rights to some of the world's best quality diamonds for the next 10 years. No recovery The South African diamond industry has never really recover_____ from the 2008 economic slump, as declin______ production and sales figures from the department of mineral resources clearly show. In 2011 South Africa was rank_____ fourth in the production of diamonds, despite the Southern African region produc_____ 60% of the world's supply of the gems. Ahead of South Africa are Botswana (27%); Russia (19%) and Canada (18%). Angola follows South Africa with 8%.


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Annual diamond production in South Africa has decreas____ since 2005, when it peaked at 15.7-‐million carats, to seven million carats in 2011. The latest figures from the department of mineral resources indicate that 2012's figures, which are yet to be releas______, will be about 7-‐million carats.

Reports of a depress_____ global diamond sector suggest that the South African industry is likely to face reduc______ demand for a while yet, and at least in 2013. The United States, which is the biggest consumer of jewellery worldwide, is only start_____ to come out of the doldrums now.

The International Diamond Exchange said global polish_____ sales dropped to $20-‐billion from $22-‐billion and rough declin_____ to $15.5-‐billion from $18-‐billion the previous year.

Major stumbling block In the South African diamond sector the legislative and operat_____ environments are cit_____ repeatedly as a major stumbling block to the growth and development of the sector. It is too expensive to spend time cutt_____ smaller, poorer quality diamonds, and most local diamond cutters cut larger diamonds or import diamonds for jewellery.

-‐ING Form -‐ED Form

Present Participles as part of a verb form

Past Participles used as part of a verb form: present perfect

Present Participles used as adjectives to describe a noun

Past Participles used as part of a verb form: passive form

Gerund used as a noun / following a verb

Past Participles used as adjectives to describe a noun

Gerund following a preposition


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Australia's economy Did You Know? AUSTRALIA'S economy can boast more than two decades of uninterrupted annual growth, low inflation and low unemployment. This is largely thanks to structural reforms made in the early 1980s and strong demand from Asia, particularly China, for the country's mineral and energy resources. The export-led mining boom has helped to strengthen the Australian dollar. So too have relatively high interest rates and a triple-A status. Since early 2009 the dollar has risen by two-thirds against the American dollar. But commodity prices have fallen and Australia's economy is now slowing. The strong exchange rate has harmed non-mining tradable sectors like tourism and manufacturing.(…) The OECD, a mostly rich-country think-tank, encourages Australia to push ahead with structural reforms, keep labour markets flexible and improve education and training. The economy is strong, but must adapt in order to benefit from Asia's growth. Dec 18th 2012, adapted from Economist.com

Trade at a glance Exports of Goods & Services in 2011/ Share of goods by sector.

Source: Australian Department of Foreign Affairs and Trade


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DOCUMENT 1

The strains of success start to tell

Aug 25th 2012 | SYDNEY | Adapted from The Economist

THE shores of Botany Bay, near Sydney, offer a snapshot of the country’s two-speed economy. Planes taking off over the bay carry “fly in/fly out” workers to the booming resource-rich states of Western Australia and Queensland, offering wages four times Australia’s national average. For workers at Kurnell, on the bay’s south side, the outlook is not so promising. Caltex, an oil company, recently announced it would shut a refinery that has produced petrol there for almost 60 years. Over 600 jobs will go. The soaring value of Australia’s currency, thanks largely to the resources bonanza5, has made it cheaper for the company to import petrol from refineries in Asia and store it at Kurnell instead. In July Australia ticked off 21 years without a recession, a feat unmanaged by almost any other rich country. Growth this year is forecast at 3.5%. China’s rise has fuelled Australia’s prosperity. An insatiable demand for iron ore and coal, Australia’s two main exports, has helped to make it Australia’s biggest trading partner. Mining investment drove half of Australia’s growth last year. China has even resurrected Australia’s wool industry. Yet strains from Australia’s success are now starting to show. The high value of Australia’s dollar is the biggest worry. The currency has mostly traded higher than its American counterpart since early last year. Central banks and other foreign investors pouring money into Australian dollar assets are largely responsible. Foreigners now own nearly four-fifths of Australian federal government bonds. Australia’s central bank frets that this poses “important risks” for the economy. The currency has made casualties of manufacturers who can no longer export goods competitively. A recent report to Ms Gillard’s government calculated that over 100,000 manufacturing jobs had vanished since the start of the global financial crisis in 2007. Yet jobs are springing up elsewhere, especially in mining, health care and education. Australia’s unemployment remains steady at 5.2%. (…) Ric Deverell, of Credit Suisse, a bank, reckons it is too early to pronounce the end of the Australian boom. Although China’s market for iron ore has cooled, energy companies are also investing A$180 billion ($189 billion) in liquefied natural gas (LNG) projects, mainly for export to Asia. “LNG is the main game,” he says. Glenn Stevens, the central-bank governor, reckons Australia’s luck has a way to go. Australia, he says, is better off exposed to China with a high variable growth rate than to Europe with a low one. DOCUMENT 2

Australia ranked as 2nd best place in the world to be born in 2013

THE ECONOMIST Intelligence Unit where-to-be-born index 2013 ranked Australia as the second best place to be born after Switzerland.

5 Bonanza: a source of great wealth or prosperity.


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The quality-of-life index combined qualitative life-satisfaction surveys – how happy say they are – with quantitative data such as income, crime figures, life expectancy, unemployment rates, climate, and membership of social organisations. Being wealthy helps with subjective life-satisfaction, however the study found other things like crime and trust in public institutions count as well. The index takes into account 11 indicators and attributes a score out of 10 to each country. Australia scores 8.12 out of 10, with Switzerland receiving 8.22. Following Australia on the list is Norway (8.09), Sweden (8.02) and Denmark (8.01). The UK ranked 27th with a score of 7.01. In the original 1988 survey, the USA held the no.1 spot, the UK was at no.7, Switzerland was at no.13, and Australia was at no.18. These results included the ‘philistine factor’ for cultural poverty and the ‘yawn index’ if a country was considered boring. Both Australia and Switzerland scored poorly in these categories. 2 April, 2013 12:44 pm in Australia in the world DOCUMENT 3

Source : The Australian


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South Africa’s economy

Did you know ? South Africa is, along with China, Brazil, Russia and India, a member of the BRICS club of emerging world economic powerhouses.

Very much Africa's superpower, South Africa has the continent's biggest economy, though this went into recession in May 2009 following a sharp slowdown in the mining and manufacturing sectors. The construction industry, on the other hand, benefited from a huge programme of government investment ahead of the 2010 World Cup.

Many South Africans remain poor and unemployment is high - a factor blamed for a wave of violent attacks against migrant workers from other African countries in 2008 and protests by township residents over poor living conditions during the summer of 2009.

Land redistribution is an ongoing issue. Most farmland is still white-owned. Having so far acquired land on a "willing buyer, willing seller" basis, officials have signalled that large-scale expropriations are on the cards. The government aims to transfer 30% of farmland to black South Africans by 2014.

Source : BBC News Document 1


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Document 2

Document 3

Muddle through will no longer do The Economist

Slow growth and a sliding currency are alarming symptoms of a deeper malaise

Jun 1st 2013 | JOHANNESBURG

AS MOST of Africa begins to prosper, the continent’s biggest economy is faltering. Figures released on May 28th showed that GDP in South Africa rose at an annualised rate of just 0.9% in the first quarter. A new report from the African Development Bank (ADB) and the OECD, a rich-country think-tank, trumpeting Africa’s economic prospects, ranks South Africa a lowly 48th out of 52 countries in terms of its economic outlook. Yet South Africa’s forecast of 2.8% GDP growth for 2013 already looks too optimistic. The sustained 5% rate that the government says is needed to cut unemployment and poverty seems a world away.

One of the few bright spots in the first-quarter GDP figures was mining, but its output is falling again and the threat of strikes clouds its immediate prospects. Around a quarter of South Africa’s total exports are to Europe, which is mired in recession. Spending at home is also weak. Massmart, a supermarket chain part-owned by Walmart, is only the latest big retailer to report poor sales. Consumer confidence is at a nine-year low. Banks are cutting back on the unsecured credit that until recently had helped keep retail sales afloat.


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A cut in interest rates might ginger up the economy but the Reserve Bank kept its benchmark rate at 5% on May 23d, in part because of an alarming decline in the rand. The weaker currency will push up inflation, which is already close to the top of the central bank’s target range of 3-6%. The rand’s slide in part reflects external developments. Growing confidence in America’s economy has pushed up the dollar against emerging-market currencies. Prices of commodities have fallen because China is not quite as greedy for them as before.

Yet there are plenty of hazards at home. South Africa has a current-account deficit of more than 6% of GDP. It relies on foreign capital to bridge the gap between what it spends and what it earns. That makes it vulnerable to shifts in investors’ mood. And recent labour unrest has scared many off. Foreigners were net sellers of bonds and stocks in the ten days to May 27th, according to the Johannesburg Stock Exchange’s figures compiled by Citibank.

Rivalry between unions sparked a recent wildcat strike at Lonmin’s platinum mines in Marikana, where dozens of strikers were killed by police last August. (…) Joblessness is a particular problem for the young. The unemployment rate for those under 25 is 53%. Many are ill-prepared for work. Only 60% pass the matric, the high-school graduation certificate. One legacy of apartheid is that many blacks live far from where the jobs are. Even travelling to a job interview is costly because of poor public transport.

This polarised jobs market, with its sharp division between the protected and excluded, has its mirror in business. Regulations in South Africa are among the most burdensome of the 40-odd countries tracked by the OECD. It is hard for job-creating new enterprises to emerge because of red tape, so big businesses are unchallenged. Wage deals struck by big firms with big unions are imposed on others by bargaining councils. They put small firms at a disadvantage and are a barrier to start-ups. A recent academic study concluded that sectoral pay deals cut the number of jobs by 8-13% in affected industries.

Document 4 Several economic indicators are still below pre-crisis peaks Latest 3-month period* compared to pre-2009 peak level, seasonally adjusted, % * This document was last updated in February 2013

Source: OECD calculations based on Statistics South Africa and South Africa Reserve Bank database.

-20 -18 -16 -14 -12 -10 -8 -6 -4 -2 0

Mining output

Manufacturing output

Manufacturing capacity utilisation

Employment

Electricity output

Real credit to the private sector


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DEBATE TOPICS 5 & 6

Some commentators such as Jim O’Neill, the now retired Goldman Sachs executive who first coined the term BRICS to refer to the fast-growing emerging markets, question whether South Africa should be a member of BRICS.

Do you think South Africa should be/remain a BRICS member?

***

« After 10 years of emerging market growth it is time for a new world order – with the BRICs taking their rightful place at the top table », said economist Jim O'Neill in 2011, « they, along with some other rising stars, are the growth engines of the world economy, today and in the future. »

Do you share this view?


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IRREGULAR VERBS FOR BUSINESS & ECONOMICS Put the following sentences in the past (preterit & present perfect)

1. We pay in advance.

2. I find several mistakes in the invoice.

3. Did we send out the new report? à Answer the question in the preterit, with YES, and then in the present

perfect with NO

4. Did we win new contracts at the trade fair? à Answer in the preterit, with YES, and then in the present

perfect with NO

5. Consumer spending rises.

6. We’ll choose a partnership when we set up our firm.

7. The bank lends us $75,000.

8. He rings to congratulate us on winning the contract: we outshine our competitors.

9. Did we spend the entire advertising budget? à Answer in the preterit, with YES, and then in the present

perfect with NO

10. The share price falls sharply.

11. His mistakes cost the company a lot of money.

12. He always brings/keeps his laptop with him.

13. We beat last year's sales figures.

14. The Australian economy grows continuously.

15. Empowerment becomes very important in the workplace.

16. The students seek advice from a careers advisor.

17. I tell him to take the day off. He takes a day off.

18. The solicitor draws up the contract.

19. They fight very hard to keep the company afloat.

20. We run out of good ideas.

21. She puts the sensitive reports in the shredder.

22. He swears never to use that supplier again.


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23. I split the presentation into three parts.

24. They don't build the new business park.

25. She doesn't fly to Los Angeles.

26. He always feels optimistic about the company's future.

27. We hold an urgent meeting.

28. Do they buy stakes in the company? à Answer in the preterit, with YES, and then in the present perfect

with NO

29. Private businesses thrive thanks to deregulation.

30. Did the US GNP take off? à Answer in the preterit, with YES, and then in the present perfect with NO

31. The German export industry is spared by the recession.

32. The crisis hits temporary workers first.

33. The explanation for this lies in State intervention.

34. Harley-Davidson lays off thousands of workers across the US.

35. Greece is building up debts.

36. The trend falls in the second quarter: they make fewer employees redundant.

37. Prices get higher and higher.

38. Migrant workers flee poverty.

39. Will the company ride out the depression? à Answer in the preterit, with YES, and then in the present

perfect with NO

40. Will they cut a deal with the trade unions? à Answer in the preterit, with YES, and then in the present

perfect with NO

41. Our sales go up in the third quarter.

42. I’m afraid they will let him go because he broke the company’s internal rules.

43. This graph shows how many items we sell every month, i.e. our monthly sales.

44. Keynes reads mathematics and economics at Cambridge.

45. Credit Suisse swings to a fourth-quarter loss.


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MOST COMMON MISTAKES TO BE AVOIDED IN SUMMARIES AND ESSAYS

You shouldn’t write You should write to realize your objective to work in a society responsabilities to favorize growth/business activity Europe knows a recession Greece is touched by the crisis the concurrence à concurrents the company grew up fastly their losts reached £ 20 billions the last recession started in 2008 This article talks about The informations, advices this term/ word designs an employee the economical crisis this value pack is more economic the actual crisis started in 2008 the eventual change in company structure

to reach your objective, achieve your goal to work in a company, firm, corporation responsibilities to boost growth, to favour economic activity Europe is going through a recession Greece was hit by the crisis Ø6 competition à competitors the company grew fast, went from strength to strength, expanded rapidly their losses reached £ 20 billionØ7 the latest/ most recent recession started in 2008 This article deals with, analyzes The information (les informations), the advice (les conseils) this term/word refers to an employee the economic crisis this value pack is more economical (=cheaper) the current/ present crisis started in 2008 the possible change in company structure

Gagner: to win (gagner par chance)/ to gain (tirer avantage de)/ to earn (gagner par son travail, ses efforts)/ to save (gagner du temps, de l’argent, économiser sa peine, ses efforts) Manquer: to miss (rater par manque de temps)/ to fail (rater)/ to lack something (manquer de quelque chose). Important: a significant contribution/ a leading economic analyst / a major change / big losses. Permettre: to allow, to permit (autoriser)/ to enable … to …, to make it possible for… to… (donner la possiblité à)/ to give… an opportunity (donner la possibilité/ l’occasion de). 6 Rappel: * lorsque l’on parle de quelque chose de manière générale, il ne faut pas écrire ‘the’ en anglais ; exemples: competition is tough/ growth is rising / unemployment is high etc.

* Lorsque l’on parle de quelque chose en particulier, on peut utiliser ‘the’ ; exemples: the Chinese growth rate / the heyday of union militancy in Great Britain etc.

7 Rappel 2: * on écrira ‘20 million dollars’ mais ‘millions of dollars’. La même règle s’applique à ‘ten, hundred, thousand,’ et ‘billion’ ; exemple: ten billion (dix milliards)/ tens of thousands (des dizaines de milliers).

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