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)
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
The Relationship between the Repo Rate, Disposable Income, Inflation and In Turn Economic Growth in South Africa
- ... Figure 1.0 (Tradingeconomics.com, 2014) Figure 1.0 shows how the inflation rate has been recorded since 2011. Form the graph it can clearly be seen that there has been an upward trend. Inflation is used here as it relates more directly to economic growth rather than the repo rate. To see how the inflation rates increased/decresed one must look at the transmission mechanism. The transmission mechanism is the way that the fluctuations in the repo rate effect inflation and economic growth (Riksbank.se, 2011).... [tags: economic analysis]
1916 words (5.5 pages)
- Every macroeconomic policy aims at keeping the output growth rate at a high and sustainable level, and the inflation rate at a stable, desirable level. Price level stability is crucial in determining the output growth rate. This led central banks in a number of countries to implement inflation targeting regimes. Such decisions give rise to the important question: what is the most suitable inflation target. The literature regarding the nature of the relation between inflation and growth goes back to the 1960s.... [tags: regression model, inflation, economic growth]
1506 words (4.3 pages)
- 3.1 Determinants of Exchange Rate Foreign exchange rate is the price of a unit of foreign currency in terms of the domestic currency . In a floating exchange rate mechanism, foreign exchange rate is determined in the same way like the price of any other commodity in a free market economy. Thus, change in the value of the domestic currency relies on factors like foreign exchange reserves, money supply in the economy, the central bank’s policies and differences in the interest yield on dated securities of the concerned economies.... [tags: capital, inflation, interest]
1033 words (3 pages)
- At some point in life, everyone has been in situations when parents have repeatedly stressed that education is paramount to one’s development. At the time, one is unable to realize the significance that academic development could have on a wider social and national extent. The introduction of the first steam engine in 18th century - the Industrial Revolution -resulted in prosperity in almost all areas of life first in the United Kingdom, and later in the rest of the Western Europe, which shaped a new worldview, placing education as one of the top measures to consider, when determining a country’s growth.... [tags: Economics]
1458 words (4.2 pages)
- Introduction There is an existing debate among economists around whether financial development causes economic growth or growth is followed by other factors. To understand this relationship many researchers have focused on the impact of banks in the financial market on economic growth. The basic idea of financial development and economic growth was raised by Schumpeter (1912) who argued that the ability of financial sector in financing the entrepreneur’s innovation will lead to growth. Opponents of this idea argue that stock markets are not effective in promoting economic growth.... [tags: Economics]
1321 words (3.8 pages)
- In this essay I will be discussing the key factors that a firm should consider when setting the price of a product. I will examine what the most important factors are and how they contribute to the pricing of a product. Pricing of a product whether it is for a small business or a large business a pricing of a product is a very important element of any successful business. I believe that there are seven key points to pricing a product and I will explain them and analyse these below. 1: Costs – When it comes to costing it is necessary for business to sell their products for more then what they create the product for.... [tags: Supply and demand, Marketing, Factor analysis]
1007 words (2.9 pages)
- Economic Growth Economic growth refers to the rate of increase in the total production of goods and services within an economy. Economic growth increases the productivity capacity of an economy, thereby allowing more wants to be satisfied. A growing economy increases employment opportunities, stimulates business enterprise and innovation. A sustained economic growth is fundamental to any nation wishing to raise its standard of living and provide a greater well being for all. Gross domestic product (GDP) is the monetary value of all final goods and services produced over a year.... [tags: Economics]
683 words (2 pages)
- Market Potential Index International business can be quite challenging and unsuccessful, if multinational companies do not look at the environment where they want to explore and invest. There are different aspects and market dimensions that can tell decisions makers if it’s convenient to invest in different markets. According to Global Edge (2014), “Global marketing has become more and more important over the years with the increasing trend of internationalization. Faced with too many choices, marketers have the challenge of determining which international markets to enter” (para.... [tags: Economics, Economic growth, Macroeconomics]
1017 words (2.9 pages)
- September Rate Hike Still in Play Fed Chair Yellen has repeatedly made it clear that the path of policy is data dependent. The advance release of Q2 US real GDP probably pushed the Federal Open Market Committee (FOMC) slightly more in favour of an interest rate increase and change in forward guidance at the next policy meeting on 16-17 September. Headline growth of +2.3% may not seem much to write home about, but, in the context of the new normal, this ranks as a pretty good number. The annual benchmark revision to the National Income & Product Accounts (NIPA) produced two important results: 1) Q1’s growth contraction is now no longer, and 2) average real GDP growth between 2011 and 2014 has... [tags: Inflation, Monetary policy, Unemployment]
1755 words (5 pages)
- It is well documented that Malaysia is a country that experiences fast and rapid growth in its overall economy. According to the Asian Development Bank (ADB), Malaysia has the potential to rise as one of the seven drivers of the Asian economy by 2050 led by China, India, Indonesia, Japan, South Korea, Malaysia and Thailand (Malaysian Insider, 2011). In the 1970’s, Malaysian companies started to focus on foreign investment but the numbers were still small. These investments started off focusing on banking and finance sectors of developed countries such as the US and Australia.... [tags: investments, markets, internalization]
2023 words (5.8 pages)
- An Analysis of Relation between Nature and Spirit in Ode to the West Wind
- Arguement for the Legalization of Cloning
- The Impact of World Hunger on Poverty
- Vietnam: A Silenced Country Screaming for Amelioration
- Disparity of Consumer’s Perception and Brands’ Sustainable Practices
- The Lack of Justification for Increasing Taxes on the Rich