Q.6. Buffalo city has been losing population and employment steadily for past 50
ID: 1147716 • Letter: Q
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Q.6. Buffalo city has been losing population and employment steadily for past 50 years. But l has been observed that the nominal wage didn't fall sharply during this period. There exists a locational equilibrium where the real wage in Buffalo is equalized with the real wage of other cities. Based on this information, answer the following: a) so even when there has been a loss of employment and population, how is it possible that there ha:s been a small change in nominal wage and still achieve a locational equilibrium in real wages with other cities? Explain it with the help of a housing market diagram in Buffalo? San Francisco city has a lot of housing regulations which makes the housing supply inelastic after the existing level of housing supply. At the same time, increasing number of people move to San Francisco for employment opportunities. But in a place like Albany which is experiencing an increase in employment, has an elastic housing supply. Given this information, answer the following: b) How the change in housing rent will be different between these two cities when there is an increase in housing demand? Explain it with the help of a diagram. c) Given the housing market situation, how the change in nominal wage will be different between the.. two cities when there is an increase in labor demand? Explain it with the help of a diagram.Explanation / Answer
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Jobless growth refers to the persistent high growth of a county’s GDP without adding new jobs/enough jobs to the vast unemployed population. Historically, the countries of the world have shifted their economy from primary (agriculture and all) to secondary (manufacturing) to tertiary (services) and have improved the lives of their citizens by a growing GDP corresponding with the growing employment. The US, UK, France, Germany and several other developed and developing countries are examples of it. However, the case seems to be different for India which has shifted its economy from primary to tertiary sector growth and the latter contributes more than half to the GDP. This different approach has caused the manufacturing industry to remain almost stagnant at near 17% for more than a decade now, prompting the Government of India to launch ‘Make in India’ for promoting growth in the manufacturing sector. With the completion of 25 years of Economic reforms in 2016 and a transitional phase of demography that India is experiencing, it becomes essential for us to analyze if this jobless growth is an outcome of ‘Economic reforms’ of 1991.
ECONOMIC REFORMS OF 1991—
On the midnight of 15th August,1947 when the world was sleeping, India was waking up to its Independence. The man addressing the Constituent Assembly and the representatives of the whole country was the first Prime Minister of India—Pt. Jawaharlal Nehru. PM Nehru has played a significant role in the independence of the country and was a supporter of ‘Socialism’ in the country. This objective of socialism however should be adopted gradually through the democratic means—believed Nehru. Thus, the country embarked upon the route of socialism with new Industries and Dams being touted as the ‘Temples of Modern India’.
The democratic way to Socialism was based on government’s regulation and policies of License-Quota-Inspector (LQI). Based on the centralized Five Year Plan system of the USSR (the first Socialist country), the system soon achieved the notoriety of being inefficient and used for filling the coffers of the corrupt officials while preventing competition and getting the production process to halt by the Trade unions and other protestors frequently. It proved to be unhealthy for the country’s growth which soon shrunk due to loss making govt. owned large corporations (PSUs) and not improving the lives of billions even after displacing millions from their lands.
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