Asian countries have been experiencing great economic growth for these past years since the early 1970s. The eight main economies which contribute highly to the tremendous economic growth in this region are Japan, Hong Kong, Republic of Korea, Singapore, Taiwan, China, Malaysia, Indonesia and Thailand. There are many contributing factors to such tremendous growth and the author agrees that one of the main success contributing factors is the continuous macroeconomics stability in these economies.
To understand how macroeconomics affects an economy’s growth, we need to fully understand what macroeconomics is. Investopedia defines macroeconomics as the field of economics that studies the behaviour of the aggregate of the economy (Investopedia). There are many macroeconomics factors such as government policies, inflation, gross domestic product (GDP) and unemployment rate which we need to study to help aid us in forecasting predictions and to make analysis of the health of an economy.
CASE STUDY
As part of the assignment, the author will be discussing Malaysia’s economy progress and its macroeconomics behaviour. Malaysia’s economy over these past years has been growing stably and recently it is reported that the GDP has expanded 0.08 percent in the first quarter of 2014 over the previous quarter. The Bank Negara said in March that the GDP may rise 4.5 percent to 5.5 percent in year 2014, up from 4.7 percent in year 2013 (Tradingeconomics.com). Below graph gives an insight on GDP fluctuations from year 2011 to first quarter of year 2014.
Source: www.tradingeconomics.com
Population
Population in Malaysia is rapidly growing and this contributes to the high labour productivity which helps to boost the economy...
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... must now focus on developing the rural states and create new sectors to expand its current economy. New policies should be created to support the lower income population financially in order to reduce credit debts.
The government needs to continuously monitor its interest rate and ensure that it does not hike up to prevent unexpected inflation. If the inflation rate gets too high, there will be a downfall in its economy. It is very difficult for the government to recover from the downfall while trying to compete with the rest of the growing economies. The central bank must work hand in hand with the government to reduce the country’s debt in order to maintain the current luxury of economic growth. If the government manages to successfully implement all that was discussed, the nation will continue to enjoy a stable and growing economy, on par with the rest.
The fluctuations of economic growth are known as the business cycle. The GDP is a useful indication and measurement of the fluctuations of economic contractions. The measurement of GDP can be approached from three angles: value added by industry, final expenditures, and factor incomes (2008). The first angle measures the value added created by industry; the output less and inputs purchased from other producers. The second angle measures expenditures by consumers, businesses on investment goods, government on services and goods, and foreigners for exports; minus expenditures by domestic residents on imports. The last angle measures incomes generated in production, operating surplus generated by business and compensation of employees (2008). The GDP does not remai...
In the study of macroeconomics there are several sub factors that affect the economy either favorably or adversely. One dynamic of macroeconomics is monetary policy. Monetary policy consists of deliberate changes in the money supply to influence interest rates and thus the level of spending in the economy. “The goal of a monetary policy is to achieve and maintain price level stability, full employment and economic growth.” (McConnell & Brue, 2004).
This essay seeks to explain what are monetary and fiscal policy and their roles and contribution to the economy. This includes the role of the government in regulating the economical performance of a country. It also explains the different features and tools of monetary and fiscal policy and their performance when applied to the third world countries with a huge informal sector.
The health of the Singapore economy based on the analysis of its positive balance of payment is very favourable because it is shown in part (a) that Singapore economy is growing at a high rate and is assured of economic growth. Singapore has very few debts and these debts will not hinder further plans as the income generated will be more focused on research and development sector rather than repayment of debts. Additional, Singapore’s Gross Domestic Product (GDP) is high and this means that the production activities are also high and the people within
Over the years, the Philippines has gone from being one of the richest countries in Asia to being one of the poorest. It has experienced growth and development since World War II. The current administration under President Gloria Macapagal-Arroyo is aiming for a more rapid growth in the coming years. In 2004, the Philippine economy grew by 6.1% surprising everyone. In 2005, the Philippine peso appreciated by 6%, the fastest in the Asian region for that year. At present, the administration is meeting its expected target growth and is continually looking positive for the future.
Following the trend of economy, it is important to investors to understand that strong economy creates strong stock market. To elaborate further, as stock prices are increased by current and future expectations of earnings, thus without a strong economy it would be difficult for the companies to increase and sustain their earnings (Kong 2013). The economy development is usually calculated using the gross domestic product of a countries. On the other hand, a change is the stock price can also cause a major impact to the consumers and investors directly. Hence, a loss in confidence by investors can cause a downturn in consumer spending in the long term, which will also affect the economy’s output (Aysen 2011). The graph below shows the relationship of stock market price (KLCI) and the GDP of Malaysia in 2009. Thus, it can be concluded that the economy and the stock market has a positive relationship.
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.
The macroeconomic environment is a dynamic environment, which could not remain unchanged (Gajewsky 2015). There are many factors influence the global macroeconomic environment, such as interest rate, exchange rate, GDP，aggregate demand, monetary policy and other macroeconomic variable (Oxelheim and Wihlborg 2008). These factors are closely associated with commodity price.
It is difficult for government to achieve all the macroeconomics objectives at the same time. Conflicts between macroeconomics objectives means a policy irritating aggregate demand may reduce unemployment in the short term but launch a period of higher inflation and exacerbate the current account of the balance of payments which can also dividend into main objectives and additional objectives (N. T. Macdonald,
Due to rural-urban migration, there has been increasing levels of poverty and depopulation in rural areas. This is one of the reasons why the government has seen it as necessary and made it a priority to improve the lives of the people who live in rural areas. Rural development is about enabling people in the rural areas take charge of their destiny. This is through the use and management of the natural resources they are exposed to. This is a process through which people learn over time and they use this knowledge to adapt to the changing world. The purpose of rural development is to improve the lives of people living in the rural areas.
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 main reason of job opportunities increasing is manufacturing, investment activities, financial market and economy situation of Malaysia is attracted to the foreigners. This will increase the wages and compensation of workers.
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...
In addition, after the 2011 Singapore general election, the government of Singapore has greatly changed its economic approach and it seems to be better for the economy of Singapore so far. On the other hand, measures have also been taken to cool down the property market which has constantly affected inflation rates, also tightened the foreign labour policies that constantly influence the labour market and unfold its impacts onto the Singapore’s economy as it comes back in one round. The unemployment rate in Singapore has been maintaining itself as being one of the lowest numbers in the world. The majority of Singapore’s labour force is well educated and highly skilled. Even primary education is a must for all citizens (Economywatch.com, 2010). In addition, for the year 2010, Singapore had the 8th largest current account balance in the world at US$49.454 billion. To conclude, Singapore has come so far from its sunken economy since independence in 1965 to become a booming and prosperous economy that it is
All government’s ultimate goal is to maintain a strong and sustainable economy but there are so many factor to consider in making it work right. Economic is a complicated matter but is very important. The government is there to look after its people and one of their goal is to provide everyone a better/higher standard of living. In this report we would like to look at the Philippine economy using the concept of Inflation and will extend the report to the importance of GDP