...Lit review from the long term impact of health on economic growth in Pakistan 2. LITERATURE REVIEW As mentioned in introduction that numerous studies have been conducted on the relationship between human capital development and economic growth. The main conclusion of these studies is that there exists a positive relationship between human capital and economic growth. (1) It is only last decade that there is a flurry of studies exploring the relationship between health and economic growth. By using the adult survival rate as an indicator of health status, Bhargava, et al. (2001) finds positive relationship between adult survival rate and economic growth. Results remains similar when adult survival rate is replaced by life expectancy. However, fertility rate have a negative relationship with economic growth. Because life expectancy is highly influenced by the child mortality. Growth in workforce is mostly lower than population growth. Resultantly high fertility rate reduce the economic growth by putting extra burden on scare resources. Mayer (2001) also uses the probability of adult survival by gender and age group as a measure of health status. By using Granger-type, causality test study concludes that health status causes economic growth in Latin America generally, and specifically in Brazil and Mexico. Improvements in adult health are associated with 0.8-1.5 percent increase in annual income. Moreover, the growth impact is higher for improvements in health of female compared...
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...markets, externalities arising from production and consumption and the theory of firms. However, macroeconomics is the concentration of the overall economy behaviour which is looking at ‘aggregate’ variables such as aggregate demand, national output and inflation. ‘Aggregate demand is the demand for the gross domestic product (GDP) of a country,’ the level of national output can be determined by AD which places a leading role. Aggregate demand is represented by this formula: Aggregate Demand (AD) = C + I + G + (X-M). ‘C’ means Consumers' expenditures on goods and services. ‘I’ expresses investment spending by companies on capital goods. ‘G’ indicates government expenditures on publicly provided goods and services. ‘X’ signifies exports of goods and services and ‘M’ presents imports of goods and services. Moreover, macroeconomics is also concerned with issues. Besides, there are some objectives that governments or countries want to achieve. Finally, policies help to accomplish those objectives. All economic analysis that refers to aggregates is macro. The coefficient of UK unemployment, the rate of inflation in the UK, the UK economic growth rate; these are all UK aggregates and therefore macro issues. Full employment, low...
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...[Cover page] Policy Analysis Unit (PAU) Working Paper Series: WP 0604 Inflation and Economic Growth in Bangladesh: 1981-2005 Shamim Ahmed Md. Golam Mortaza December 2005 Policy Analysis Unit (PAU) Research Department, Bangladesh Bank Head Office, Dhaka, Bangladesh (www.bangladeshbank.org.bd) (www.bangladesh-bank.org) Policy Analysis Unit* (PAU) Working Paper Series: WP 0604 Inflation and Economic Growth in Bangladesh: 1981-2005 Shamim Ahmed Research Economist, Policy Analysis Unit Research Department Bangladesh Bank Md. Golam Mortaza Senior Research Associate Centre for Policy Dialogue December 2005 Copyright © 2005 by Bangladesh Bank * The Bangladesh Bank (BB), in cooperation with the World Bank Institute (WBI), has formed the Policy Analysis Unit (PAU) within its Research Department in July 2005. The aim behind this initiative is to upgrade the capacity for research and policy analysis at BB. As part of its mandate PAU will publish, among other, several Working Papers on macroeconomic research completed by its staff every quarter. The precise topics of these papers are chosen by the Resident Economic Adviser in consultation with the PAU members. These papers reflect research in progress, and as such comments are most welcome. It is anticipated that a majority of these papers will eventually be published in learned journals after the due review process. Neither the Board of Directors nor the management of Bangladesh Bank, nor WBI, nor any agency...
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...Student’s Name Institution Instructor Date Budget Deficit Budget Deficit Budget is an estimate of the income and expenditure for some country for some set period of time say one year. Budgeting is vital in an economic perspective for the economy that desires to meet the needs of its people. Budgeting also aids an economy to hypothesise and attain the best output and revenue from the dealings in the production process. As such budgeting and forecasting serve the basic role of the economic progress of the economy based on the operations of the countries to attain the millennium development goals. Basically, the budgeting approaches used by the economy may create the deficit or at some point result in the surplus. Reduction in tax payments, increased unemployment, poor planning, increased military spending and poor projection and underestimations result in the budget deficit. During periods of economic recession in some country budget deficit is also likely to be experienced. Expansionary fiscal policy may lead to budget deficit since it involves increase in government spending. Such condition is very challenging to the economic growth and development and may also increase the rate of borrowing of a country to surpass its budget (Aaron, 2014, pp. 1). Budget deficit can be explained as the difference between the government revenue and the government expenditure calculated over some set period (one year). It occurs when the expenditure has exceeded the income for some set...
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...Introduction In macroeconomics, monetary policy is an importance tool to Central Bank and is a policy set by the members of Central Bank. It is an economic strategy chosen by government that authorizes Central Bank to regulate and influence the economic activity by controlling the monetary base flow into national economy. The goals of monetary policy are to promote growth of the economy, stability of prices and reduce unemployment rate. Monetary policy can be classified into two categories, namely expansionary monetary policy and contractionary monetary policy. Although, the objective for the two policies is the same, they adopt different approaches in reaching this objective. Expansionary monetary policy is used when a country is facing a recession in the economy business cycle, whereby it increases the money supply in economy system to meet its objectives. In contrast, where there is a peak in the economy business cycle, central bank will use contractionary monetary policy to reduce the money supply in economy system so as to retard the inflation. For example, the United States, one of the top ten richest countries in the world (IMF, 2011, pp.1), had entered into a recession seen the global financial crisis and faced a slow...
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...Export Department Country Analysis Report for International Expansion Market Analysis for: Brazil, China, Russia, South Africa, and United Arab Emirates ------------------------------------------------- ------------------------------------------------- Contents 1. Foreword 2. Evaluation Criteria 3. Country Analysis – Demand Factor: Population 4. Country Analysis – Demand Factor: Number of Subscriptions and Percentage 5. Country Analysis – Demand Factor: GDP per Capita and Growth Prospective. 6. Country Analysis – Cost Factors 7. Country Analysis – Sociopolitical Factors 8. Conclusion - Best Country for Potential Entry 9. References ------------------------------------------------- 1. Foreword Hydis Electronics currently has the highest market share of mobile phones in South Korea. We have been focusing heavily to reach the status of market leader in our domestic market, but the Korean market for mobile phones has reached a plateau and our growth has been slow during the past few quarters. As such, we should now focus our strategies on expanding to foreign markets as a new engine for our company's growth. Possible candidate countries for entry were Brazil, China, Russia, South Africa, and United Arab Emirates (UAE). The goal was to figure out which country would have the highest potential profit as well as future growth for our company while having low risk involved. Upon careful analysis of the economic...
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...SERIES IZA DP No. 6057 PAPER The Global Economic Crisis: Long-Term Unemployment in the OECD P.N. (Raja) Junankar DISCUSSION October 2011 Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor The Global Economic Crisis: Long-Term Unemployment in the OECD P.N. (Raja) Junankar University of New South Wales, University of Western Sydney and IZA Discussion Paper No. 6057 October 2011 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 E-mail: iza@iza.org Any opinions expressed here are those of the author(s) and not those of IZA. Research published in this series may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary...
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...A Paper Presentation on EQUILIBRIUM EXCHANGE RATE Theme: International Finance & Trade Institute Name: Symbiosis Institute of International Business (SIIB), Pune Student Name: 1) Swapnil Rathi 2) Kuldeep Joshi Contact No: Swapnil – 9860222020 Kuldeep – 9028029154 Email id: swapnilrathi@siib.ac.in kuldeepjoshi@siib.ac.in 1 ABSTRACT The exchange rate is the rate at which the supply for a currency meets the demand of the same currency. As foreign exchange rates are affected by a number of factors, the equilibrium exchange rate in turn, are also influenced by its supply and demand. Hence equilibrium is achieved when a currency's demand is equal to its supply. Analysing the equilibrium levels of the exchange rates plays a crucial role in the policy making decisions of the policymakers. Exchange rates have a major influence on the prices faced by the consumers and producers throughout the world and the consequences of misalignments can be extremely costly to the nations involved. Therefore economists have developed number of methodologies for calculating the exchange rates. Each methodology involves conceptual explanations and/or imprecise estimates of key parameters and different methodologies which generate different calculated values for equilibrium exchange rates. This makes it difficult to have much confidence in estimates derived from any single methodology on its own. By the same token, it suggests that, ideally, policymakers should inform their judgments through...
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...Ireland and the FDI Is the growth sustainable in the long term? There are many factors indicating that Ireland’s growth is sustainable in the long term, however, future growth is expected to be more modest than it has previously been. Ireland’s long-term competitiveness is based on an educated, multilingual labour force as well as low wages and tax rates. These friendly policies that prevail will presumably lead to growth and the diversified FDI will also shield against external shocks. In addition, Ireland has an industrial and tax policy, which is consistently very supportive of businesses, regardless of which political party is in power. Ireland’s good transportation logistics and good location also make it easy to move products to major markets in Europe quickly. Ireland’s sound macroeconomic policies will lead to continued growth, therefore, allowing it to maintain its competitive edge over other EU countries. Alternatively, there are those who believe that, “the Celtic era, with double-digit growth rates, belongs to the past and that competitiveness has deteriorated”. Ireland’s overdependence on FDI makes its economy vulnerable to external shocks. Many believe that the boom was purely a by-product of American growth rather than a self-sustaining, local phenomenon. The foreign sector had limited ties with local businesses and the FDI-focused policy yielded little in terms of creating a vibrant domestic economy. In 1998, statistics showed that 47% of the industrial...
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... R 4 THE ECONOMY IN THE VERY LONG RUN: The Economics of Growth LEARNING OBJECTIVES After reading and studying this chapter, you should be able to: ̈ Understand that economic growth is due to growth in inputs, such as capital and labour, and to improvements in technology. ̈ Understand that capital accumulates through savings and investment. ̈ Understand that the long run level of output per person depends positively on the savings rate and negatively on the rate of population growth. ̈ Understand that the basic economic growth model predicts that standards of living in different countries will eventually converge. 61 62 PART 2 The Economy in the Long Run and the Very Long Run e have enormously higher incomes than did our great-grandparents. People in industrialized nations are far wealthier than people living in less developed countries. In fact, North Americans and many Europeans had higher incomes a century ago than people in poor countries do today. What accounts for these vast differences? What will determine our standard of living in the future? Growth accounting and growth theory answer these questions. Growth accounting explains what part of growth in total output is due to growth in different factors of production (capital, labour, etc.). Growth theory helps us understand how economic decisions control the accumulation of factors of production, for example, how the rate of saving today affects the stock of capital...
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...account + Official Reserve Account = 0 ] For example, if a country has a positive capital and financial accounts, it will have a current account deficit - because the debit is more than the credit. It means that this country is borrowing and using other countries savings to meet its local investment and consumption demands. In contrast, if a country has a negative capital and financial accounts, it will have a current account surplus - because the credit is more than the debit. It means that this country is using its saving for investing. In Singapore, the government is heavily managed the country’s economy. It promotes high levels of savings. Also, the Monetary Authority of Singapore focuses on accumulating foreign reserves. Consequently, Singapore became a net creditor to other countries. It has a large current account surplus and saving accumulation in excess of domestic investment demand, which lead to produce a long-term real appreciation of the SGD. 2. What is a real exchange rate? What determines real exchange rates in the long-run? Real Exchange Rate = Nominal Exchange Rate - Inflation It’s the ratio at which any country’s own currency is equivalent to other currencies in terms of purchasing power. It discounts inflation from the nominal interest rate. It also provides a better measurement of countries exchange rates. The Monetary Authority of Singapore focused mainly on inflation and didn’t use exchange rate as a competitive tool. Therefore, Singaporean...
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...Considered a Bad Thing LaQuan Howell Embry-Riddle Aeronautical University Abstract Economist for a long time have argued about the causes and implications of inflation. This research aims at identifying the various negative implications that inflation causes. The research indicated that inflation causes negative effects like increase in prices of goods and services, interrupted purchasing power of consumers, and slow economic growth. Introduction Inflation is defined as the decrease in the value of money. It is the continued increase in the level of prices for products and services especially over a short duration of time. This means that the value of a currency does not stay constant during period of inflation, and the purchasing power of consumers’ declines. Thus, whatever consumers earn, will buy less of a good or service. When inflation increases it results to an increase in the prices of commodities, and this may bring about employees demanding an increase in wages. This normally translates to a decrease in profit for the company. Consumers will have less amount of money to use; this could translate to a decrease in company sales. Disadvantages of inflation Inflation is usually considered to be an issue when the rate rises above two percent. The higher the rate of inflation is, the more the problems it causes. Inflation affects the menu costs of goods and services. Menu cost is the charge of...
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...and output levels and fluctuations in these aggregates magnitudes. A macroeconomic stable environment can be defined as one in which inflation is low and predictable, the exchange rate is near its equilibrium level, the government budget is well managed, the budget deficit relative to GDP is at a reasonable level and the use of central bank credit to finance the budget deficit is kept at a minimal level. Macroeconomic stability sends important signals to the private sector about the direction of economic policies and the credibility of authorities’ commitment to manage the economy efficiently. Such stability, by facilitating long term planning and investment decisions, encourages savings and capital accumulation by the private sector. Macroeconomic instability takes place in two forms namely exogenous shocks and inappropriate policies. Exogenous shocks (such as reversal capital flows, terms of trade and natural disasters) require compensatory action and can rug the economy into disequilibrium. On the other hand inappropriate policies such as the monetary and fiscal policy have a direct impact on the macroeconomic stability of a country. According to (AmosWeb, 2012), governments pursue three major macroeconomics goals namely economic growth, low unemployment and low inflation rates. Economic growth can be defined as the yearly change in...
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...Introduction Over a decade, the consensus of economics growth remains the key focus for every nation notably in least development countries (LDC). Poverty eradication, income distribution and welfare enhancement often discussed widely by these nations. Economic growth is often seen as the 'holy grail' of economic policy. This simplistic emphasis on economic growth is often criticized because of the limitations of economic growth in improving living standards. Another question arise is does economic growth promote sustainable improvement on country development? Malaysia economy has been transformed from a protected low income supplier of raw materials to a middle income emerging multi-sector market economy in the past 20 years. This is driven by the export of manufacturing goods, particularly electronics and semiconductors, which constitute about 90% of exports. In this paper, the primary objective is to investigate what is the relationship between openness, inflation and FDI with economic growth. Export and import often plays pivotal role in determine the gross domestic product (GDP) in a nation. In particular, the research question to be outlined is how does openness, inflation and FDI affect economic growth. Multinational corporations (MNCs) are those organizations that own or controls productions of goods or services in one or more countries other than its home country. MNC plays major role in foreign aids recipient countries, it contribution to a nation’s economy has became gradually...
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...Introduction of Foreign Direct Investment Foreign Direct Investment (FDI) is known as the long term participation by country A into country B. It usually involves participation in management, joint-venture, transfer of technology and expertise. In other words, foreign direct investment is the cross-border corporate governance mechanism through which a company gains productive assets in another country. FDI is different from other major forms of foreign investment in that it is motivated largely by the long-term profit prospects in production activities that investor directly control (Wong, 2005). Wong also says that almost most of the developing and least developed countries worldwide equally participated in the process of direct investment activities. Over a long period of time, foreign direct investment (FDI) forms a major part of investment in most industrial and some developing countries. Besides that, he did explain that some FDI is intended to utilize local natural resources. Sometimes it is to employ relatively cheap labour, and sometimes to produce goods near to markets. Moreover, foreign direct investment can be a significant driver of development in poor nations. According to Katerina, John and Athanasios (2004), it provides an inflow of foreign capital and funds, in addition to an increase in the transfer of skills, technology, and job opportunities. Furthermore, they said it would be difficult to generate this capital through domestic savings, and even if it were...
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