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The study of economic growth focuses on the factors thayt cause an
Population growth and economic development
Population growth and economic development
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Why does economic growth rate vary across countries over long periods of time? There have been a large number of empirical studies that attempt to address this question by identifying the underlying factors that determine this rate of growth. Most of these empirical studies have in common that only a few explanatory variables are included in their analysis but differ in the variables selected. This study will include some of the more common variables found in previous papers such as; investment ratio, government expenditure, inflation, openness ratio, life expectancy and fertility, but differs by the additions of foreign direct investment, education expenditure and health expenditure variables in the analysis. The motivation behind the inclusion of these specific explanatory variables is due to the lack of conclusive findings in past literatures and to examine if these variables have a significant effect on the growth rate GDP per capita. This paper differs to existing literatures in that the pooled countries used in the study will be split into two additional OLS regressions categorised by 34 OECD member countries and 34 developing countries. The purpose of this is to see if there is clear evidence of the relationships between the variables and the economic growth rate of the two groups and how they differentiate. The paper will be split into five sections; the next section will consist of an analysis and comparisons of past studies in the form of a literature review. The third section will explain the key variables and data for this study along with some preliminary analysis in the form of a descriptive statistics table and a correlation matrix. The fourth section will cover the specific methodology including the reasoning behi... ... middle of paper ... ...ator used for his regressions are in fact robust and his results suggest that a more open country will experience faster productivity growth, thus enhancing the economic growth rate. Historically, academics and policy maker have devoted enormous amounts of energy to the question of whether openness is good for growth. Most evidence is based on regression analysis but these are heavily affected by endogeneity issues. A paper of significance by Rodriguez and Rodrik (2000) criticises the conclusions of a number of statistical studies that openness is associated with higher growth rates. They show that openness in the sense of liberal trade policies seems to have no guarantee on faster growth rates. In the main, they state - “the nature of the relationship between trade policy and economic growth remains a very much open question” (Rodriguez and Rodrik, 2000, p.266)
The measure of growth is flawed, how countries see their growth is based on the consumption of their people. Many countries use the GDP (Gross Domestic Product) as an indicator for growth, as defined in It’s All Connected, “(GDP) is a calculation of the total monetary value of goods and services produced annually in a country” (Wheeler 11). The...
This paper will be outlining the theory behind the Endogenous Growth Theory, or EGT, and its comparison to other competing theories. To begin though it is important to clarify that the word endogenous just means to originate from within, or not attributable to any external or environmental factor, so one can assume that this theory relates to growth happening within the region instead of having to depend on external forces for market growth. EGT forces primarily on human capital, innovation, knowledge, and entrepreneurship to be the major contributors to economic growth within a region (Bennett). This innovation is a large part of the EGT, which manifests itself from research and
Robert E. Lucas Jr.’s journal article, “Some Macroeconomics for the 21st Century” in the Journal of Economic Perspectives, uses both his own and other economist’s models to track and predict economic industrialization and growth by per capita income. Using models of growth on a country wide basis, Lucas is able to track the rate at which nations become industrialized, and the growth rate of the average income once industrialization has taken place. In doing so, he has come to the conclusion that the average rate of growth among industrialized nations is around 2% for the last 30 years, but is higher the closer the nation is to the point in time that it first industrialized. This conclusion is supported by his models, and is a generally accepted idea. Lucas goes on to say that the farther we get from the industrial revolution the average growth rate is more likely to hit 1.5% as a greater percentage of countries become industrialized.
Every year there is a ‘league table‘ published showing the level of economic growth achieved by each country. The comparison is made using each countries Gross Domestic Product, or GDP. An important factor to look at is the difference between actual and potential economic growth. Actual economic growth increases in real GDP. This increase can occur as result of using previously unemployed resources, or reallocating resources into more productive areas or improving existing resources. Whereas potential economic growth is the productive capacity of the economy. For example, it can be shown by the predicted ability of the country to produce goods and services. This changes when there is an increase in the quantity or quality of the resources. All countries have different ways of achieving this with the resources they have available to them. For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from country to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output.
World Bank (2005). Economic Growth in the 1990s: Learning from a Decade of Reform. World Bank, Washington, DC.
Now within the rest of this paper you will be finding a few different things getting discussed. Staring it off we will be discussing the articles that we have found to make our arguments and hypotheses. After wrapping up the literature reviews we will be discussing the hypotheses thus continuing onto our variables and indicators. Once we discuss our hypotheses we will be moving onto the research design. The research design will have our general issues, sampling, and methods.
In order to assess the current state of the economy, the examination of important economic indicators or variables has always played a vital role in the understanding of the complex economic systems we live in. The analysis of these economic variables studied by many, not only has served as a tool to evaluate the current economic performance of a country, but also has allowed experts to envisage and continue the pavement of an economy's road. Currently, some economic variables have had favorable improvements indicating a general good outlook for the economy for the following months, requiring a further individual analysis and comparisons in order to foresee crisis or successes.
The economy of a nation is a major indication of its success. One aspect of a nation's economic success or failure is the system of government. Whether a nation is socialistic, communistic, ruled by absolute sovereignty, or based on capitalistic principles can be a key factor in a country's economic success or failure. Government is the foundation of an economy but it is not what determines its success. Issues that determine a nation’s economic success include growth strategies, improved or increased resources, investment and savings, government policies, trade, foreign direct investment, income distribution, labor allocation, innovations in technology, and several other economic issues. I feel that economic growth is the main indicator of economic success. Additionally, innovations in technology, improving human capital, and improving foreign direct investment (FDI) are three issues that can lead to economic growth.
There are at least four different research perspectives about the relationship between development and economic growth. Firstly, economic growth is the basis for social development. Secondly, economic growth and social development are not necessarily linked. Thirdly, both economic growth and social development are not basic causes by each other, but they depend on interaction. Fourthly, social development is the prerequisite for economic growth (Mazumdar. 1...
time. As time progresses, countries seem to be able to grow at a much more rapid
In order for any country to survive in comparison to another developed country they must be able to grow and sustain a healthy and flourishing economy. This paper is designed to give a detailed insight of economic growth and the sectors that influence economic growth. Economic growth in a country is essential to the reduction of poverty, without such reduction; poverty would continue to increase therefore economic growth is inevitable. Through economic growth, it is also an aid in the reduction of the unemployment rate and it also helps to reduce the budget deficit of the government. Economic growth can also encourage better living standards for all it is citizens because with economic growth there are improvements in the public sectors, educational and healthcare facilities. Through economic growth social spending can also be increased without an increase of taxes.
Theoretical model of modern economic growth shows that long-term economic growth and raise the level of per capita income depends on technological progress. This is because of without technological progress and with the increase of capital per capita, marginal returns of capital would diminish and output per capita growth would eventually stagnate (Solow, 1956; Swan, 1956). Studies have shown that “experience, skills and knowledge in the long-term economic growth is playing an increasingly important role” (World Bank, 1999). Despite how technological progress work on economic growth, and how there are different views on the role of in the end, but I am afraid no one would deny that technical progress in the important role of economic development. In this sense, for a country to achieve long-term economic growth, we must continue to promote technological progress. However, economic growth theory is analyzed in general, and usually under the assumption that in the closed economy, and technological progress in a country not normally have taken place in various departments at the same time, and now the economy are often increasingly open economy. In this way, the technological progress in different economic impact on a country may be quite different. In addition, we assume that technological progress is Hicks neutral, is to an industry in itself, but technological progress also reflects the establishment of new industries and development. The new industries and technology-intensive industries generally older than the high, the use of less labor. Even the old industries, the general trend of technological progress is labor-saving.
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public
The objective of this paper is to make an economic development and economic growth comparison of these four countries. The comparison will be multi-faceted. It will compare monetary perform...
Economic development typically involves improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates. Due to the fact that GDP alone does not take into account other aspects such as leisure time, environmental quality, freedom, or social justice; alternative measures of economic well-being have been proposed. Essentially, a country’s economic development is related to its human development, which encompasses, among other things, health and education. These factors are, however, closely related to economic growth so that development and growth often go together.