What factors might contribute to low or high growth rates in a country? How can

Question

What factors might contribute to low or high growth rates in a country? How can sustainable long-run economic growth rate be realized? What are the roles of the government in achieving sustainable long-run economic growth?

Why resources are no longer the most important indicators of economic growth disparity among countries? Which other economic and non-economic factors do you think explain the reasons behind growth disparities among countries?

What is the relationship between economic growth rate and unemployment rate?

Explanation / Answer

Factors which contribute to low growth rates in a country are the lack of a productive infrastructure such as transport facilities, roads or other communication facilities. Another factor is a lower saving rate. If a country's overall savings rate is lower, then capital formation and investment in that country will be slow which would imply a lower growth. Lack of skills and education are yet another factor. In a country, if most of the labor force is unskilled or uneducated, then productivity in the country will be severely affected which also means lower growth for the country.

Sustainable future growth rates will be achieved by making certain that a country stay competitive in each space. 1st and foremost the country should have the capital or the power to get capital so as to deploy it and increase the worth of their investment. future growth rates also are secured once the environment itself is secure like a powerful and stable government. Additionally, patent protection and a system that protects business is also a key issue. Once governments set the principles and supply a level playing field domestically alongside key elements that contribute to the power to vie internationally firms will work to realize success based on that same level playing field. Keeping interest rates low and skill sets that concentrate on current technology and trends additionally plays a key role. The govt is accountable to offer for an adequate and secure supply of currency and monetary markets that may foster the expansion of organizations.

Resources are the sole issue that give a nation with economic superior skill as in today’s’ economy, things like intellectual capital are even as necessary as resource capital. Having them human intellect to make merchandise and services will equal the advantage of getting a wealth of natural resources that give an in-built competitive advantage. Having the ability to utilize resources is the key and therefore the countries which might best utilize capital to extend economic activity have the foremost advantage to achieve. There are several factors that contribute to inequality in growth rates among developing nations. These may embrace everything from the physical geographic location of wherever people live to the infrastructure that's on the market within the country. If a country has nice resources with no infrastructure to create those resources accessible then they're at a disadvantage. Alternative contributory factors as well as the economics surroundings in which the country operates. Issues like regulation and government intervention as well as tariffs additionally play a an important role in the success of these economies. If a nation has a stable government then they're way more likely to garner support from outside investment. If political upheaval exists there's less interest to invest in those specific countries.

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