...Introduction In modern economic society, while the global countries economic become more and more integrated, each member country focuses on the financial developments and economic growth, so that they can occupy one position in the modern competitive economic environment. Financial development involve lots of factors, including producing information about possible investments and allocating capital; monitoring the firm performance and corporate governance; trading, diversification, and management of risk; mobilization and pooling of savings; and easing the exchange of goods and service. Usually the financial development level is primarily determined by the local institutional quality, the extent of government police, geographic elements, native income level and cultural tradition. These factors formed the economic environment in which the banks and other financial firms to make decision for investment project and exogenous financing, furthermore, the customers decide whether consumption or saving, moreover, the financial intermediaries finance the fund in which approach from savers to borrowers. The well financial system can perfect the effect of information, enforcement and transaction cost on the saving rate, investment decision and technological innovation, and steady state growth rate. Financial market channel the fund to investment opportunities to get the profit, so if the financial system cannot work well, the economic growth also more or less affected. The essay mainly...
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...First name, last name: Professor/tutor: Course title: Date of submission: Economic Impact of China’s Demographics Introduction Policies regarding population development are a major factor towards determining China’s future economic prospects. China is the most populous country in the world, doubling its population over the last 60 years (Lee & Qingjun 58). For the rapid population growth that China has achieved over the last few decades, controlling and monitoring the growth of the population has been at the core of the country’s administration. Policies have to be implemented that actively seek to implement demographic recommendations and stipulations with the aim of developing a sustainable population base compatible with the economy. Institution of population control legislation such as the one-child policy has effectively controlled the mushrooming population growth that distinguished China from the other world demographics. The result of the population control policy in the face of reduced death rates and low fertility rates has painted a grim picture for the Chinese economy. The result of the envisaged scenario is an increase of the number of old people in the country and a continual decline in the number of young people. This paper focuses on highlighting the potential challenges the country faces from having a reduced young workforce in an economy growing at a phenomenal rate. Due to the overhanging specter of an unsustainable population in the country with unchecked...
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...BOFIT Discussion Papers 15 • 2011 John Knight and Wei Wang China's macroeconomic imbalances: Causes and consequences Bank of Finland, BOFIT Institute for Economies in Transition BOFIT Discussion Papers Editor-in-Chief Laura Solanko BOFIT Discussion Papers 15/2011 20.06.2011 John Knight and Wei Wang: China's macroeconomic imbalances: Causes and consequences ISBN 978-952-462-711-5 ISSN 1456-5889 (online) This paper can be downloaded without charge from http://www.bof.fi/bofit. Suomen Pankki Helsinki 2011 BOFIT- Institute for Economies in Transition Bank of Finland BOFIT Discussion Papers 15/ 2011 Contents Abstract ................................................................................................................................ iii Tiivistelmä ........................................................................................................................... iv 1. Introduction ....................................................................................................................... 1 2. China’s macroeconomic imbalances ................................................................................. 2 3. China’s external imbalance ............................................................................................. 14 4. Reviewing the export surplus .......................................................................................... 22 5. The external surplus and foreign exchange reserves .......
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...the relationship between family planning, life expectancy and economic growth. Generally, most people and organizations concur that there is a relationship among these variables. Birth control has an input in the rate of population growth. The level of population in the world or in a country seems to impact on economic growth and the level of the standard of living f the people. Let us look at the question of the relationship between family planning and population growth. The more the people practice family planning the more likely that the population will stabilize in the long run. The population may also grow at a decreased rate. There is no question on the fact that family planning has assisted in controlling the rate of population growth the world over. In most countries, where family planning has been practiced the rate of population growth is lower than in countries where the issue of family planning is not wide spread. In most developed countries where family planning is practiced at a larger scale, the rate of population growth is lower than in some developing countries where there is little family planning. Let us shift attention to the relationship between population growth and economic development. Some economists have found a relationship between the rate of population growth and economic growth. They have established that countries with low rate of population growth have realized a better rate of economic growth. The most cited example is that of China. China...
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...the relationship between family planning, life expectancy and economic growth. Generally, most people and organizations concur that there is a relationship among these variables. Birth control has an input in the rate of population growth. The level of population in the world or in a country seems to impact on economic growth and the level of the standard of living f the people. Let us look at the question of the relationship between family planning and population growth. The more the people practice family planning the more likely that the population will stabilize in the long run. The population may also grow at a decreased rate. There is no question on the fact that family planning has assisted in controlling the rate of population growth the world over. In most countries, where family planning has been practiced the rate of population growth is lower than in countries where the issue of family planning is not wide spread. In most developed countries where family planning is practiced at a larger scale, the rate of population growth is lower than in some developing countries where there is little family planning. Let us shift attention to the relationship between population growth and economic development. Some economists have found a relationship between the rate of population growth and economic growth. They have established that countries with low rate of population growth have realized a better rate of economic growth. The most cited example is that of China. China...
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...1. Intro In recent years, discussions between the governments of China and the United States have centered on each country’s external imbalances, large trade surpluses for China and deficits for the United States, and the need for structural reforms to achieve more sustainable patterns of growth in future years. This paper argues that reductions in external imbalances suggest that some restructuring has occurred. However, a more detailed examination of economic developments within each country offers less basis for optimism. China has experienced a large appreciation of its real exchange rate and an external surplus less than half that of the years preceding the global recession. However, the domestic counterpart has been even-higher rates of investment as opposed to lower rates of saving and a more sustainable growth of public and private consumption. For the United States, a reduction in the external deficit has been associated with an extreme contraction of domestic investment rather than increased saving. It is noteworthy that the economic trade between the two countries has become even more unbalanced than in the years before the recession, and the bilateral deficit now accounts for two-thirds of the U.S. global current account deficit. The concluding section argues that further reduction in the trade deficit through the expansion of U.S. exporting capabilities is critical to its future performance. The section discusses policy changes that would slow the process of...
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...integration between different economies around the world and the increased impact of international influences on all aspects of life and economic activity. The four main indicators of globalization include: international trade flows, international financial flows, international investment flows and the transfer of technology, as well as the movement of labour between countries. Mao Tse Tung’s successor, Deng Xiao Ping, implemented a range of radical economic reforms that transformed China into an economy with a domestic focus to one with an international focus. Since becoming integrated within the global economy, China has become a bastion of world economic growth (increase in real GDP over time) and this has enabled it to make some progress in economic development (a broad measure of quality of life). Globalisation has affected every country around the world differently. Specifically, the Chinese economy averaged 10.1% economic growth between 2003 and 2009 as a result of globalisation, causing it to become the second largest economy in the world. China experienced its annual real GDP rising from 8% in 2003 to over 11% in 2007. This high level of growth has seen China’s share of the world economy increase by 3.5% in this period to 15% in 2006, when measured in PPP terms. China’s now accounts fro 25% of world eco growth about equal to USA’s share. The main drivers of this high rate of economic growth were business investment and net exports. Despite this extended period of growth, China’s...
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... and Australia’s per capita income growth rate per annum = 2% we can assume that per capita income in Australia has been growing in 232.55 or about 233 years since 1777. The calculation: yt = y0 (1 + ḡ)t $60,000 = $600 (1 + 0.02)t t = ln100/ln1.02 = 232.55 B. The growth rate of 2% was mismeasured, economists proposed new growth rate that equal to 3%. Based on this new rate, we can calculate Australia’s per capita income in 1850. The calculation: Yt = y0 (1 + ḡ)t $60,000 = y0 (1 + 0.03)160 y1850 = $60,0000/113.22855 =$529.90 This figure of $529.90 is plausible, back in 1850 Australia’s per capita income was still above $300, hence Australians in 1850 still could live (buy necessities and living goods). Yet if we compare to the poorest country, this figure does not show a big gap in per capita income (where in poorest country, they do not have growth in per capita income or maybe little growth). 2. A. From the article “The Myth of Asia’s Miracle” written by Paul Krugman, the leading countries in Asia achieved a rapid growth in per capita income and GPD as the feedback of a rise in production input: capital, labour, and knowledge. Also in Japan they achieved the rapid growth by an increase in its efficiency of their input (noted by Ā). From this information, the model of production could be suggested as Yt = F(Kt , Lt) = Ā Ktα Lt1-α Kt+1 = It – đKt This first model was suggested from Sollow growth model, utilising capital (Kt) and Labour...
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...subprime financial crisis in the U.S. it is evident that the U.S., China and India are dependant on each other. Although the subprime crisis was related to factors regarding monetary policy in the U.S., China and India have been negatively affected. China and India assumed that they would be immune to the after affects of the subprime financial crisis which took place in the U.S. housing sector. Unfortunately China and India have been greatly impacted by experiencing financial instability and experiencing a deep recession. China’s banks not being overly exposed to these toxic assets were supposed to be able to weather the storm and be a source for global liquidity. When U.S. imports of automobiles, electronics and machinery from China slowed down, their economy was disrupted. Similarly to the liquidity crisis taking place in the U.S., India is experiencing their own liquidity squeeze. The BSE was forced down when foreign portfolio investors withdrew over $11 billion dollars. India, China and America are commonly described as emerging powers. Over the years China and India have become economic, political and military powers in the 21st century. The United States, China and India have a common interest in peace and prosperity. This relationship provides the U.S. with low cost consumer goods and advanced manufactured products to the India and China. Recently, more people have been viewing these relationships as a threat. However, the international division of labor has...
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...www.ccsenet.org/ijef International Journal of Economics and Finance Vol. 3, No. 2; May 2011 Development of Financial Market and Economic Growth: Review of Hong Kong, China, Japan, The United States and The United Kingdom Anson Wong (Corresponding author) School of Accounting and Finance The Hong Kong Polytechnic University Tel: 852-2766-7866 E-mail: afanson@inet.polyu.edu.hk Xianbo Zhou Department of Economics Lingnan College, SUN YAT-SEN University, China E-mail: zhouxb@mail.sysu.edu.cn Received: July 20, 2010 Accepted: January 13, 2011 doi:10.5539/ijef.v3n2p111 Abstract The empirical evidence suggests that the development of stock markets in China, USA, United Kingdom, Japan and Hong Kong have independently a strongly positive correlation with their economic growth. The result brings out an important theory to support for the proposition that the stock market development is one of the key drivers of economic growth in developed and developing countries, whatever the modes of their financial systems, stage of their economic development and types of economic system. Keywords: Development of Stock Market, Economic Growth, China, Japan, United Kingdom, USA, Hong Kong 1. Introduction Numerous studies have proposed that the development of stock market is able to improve growth performance through its positive effects on capital flows, diversification of investment risk and pooling funding for the long-term industrial projects and provision...
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...Using the following country – China critically evaluate the key economic, political and technological factors conditions that have enabled it to become a “rapidly developing economy” or “emerging economy.” Also what recommendations would you make for the economy of China to sustain its economic growth? Wasay Butt China as country and an economy has grown significantly in the past few decades beyond many people’s measures and expectations. As pointed out by Findlay and O’Rourke “In the longer run, the gradual rise of China to their natural roles as major economic and political superpowers was not only the best news for global human welfare in a generation, but promised to raise a variety of geopolitical challenges which as yet remain unpredictable.” (Findlay and O’Rourke, p.18 2007) This assignment will help argue the case for the key economic indicators and the role of the government that has helped China in its momentous growth strategies and what made them so successful. In the second part I have made recommendations to China to what I think will help them sustain their economic growth based on the analysis I have provided in the first part of the essay. China’s history dates back to 1912 when it was official the republic of china was formed and Sun Yat-sen was the first proclaimed provisional president. In 1949 major combat resulted in China being forced into newer leadership (Communist Party)....
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...the research of China’s financial liberalization reform in order to discuss the economic and financial effects casted by financial liberation. Also the article pointed out the current problems of China’s financial system and provided suggestions for implementation. The main argument of policy suggestions for China is to further lower down the financial limits, so that China will be able to build a better foundation for financial liberalization. Also the effective and constant supervision and modification of the financial regulation system is also necessary for maintaining a healthy macroeconomic environment and continuing capital flows. While the economic globalization, and financial liberalization has become a major tendency that attracts a lot of people’s attention in world economic development since the 1980s, the financial liberation and reform has become a necessity for China to develop it’s financial market and economy wellbeing. 1. Introduction China, as one of the fastest expanding economy in the world, is largely owing to the economic globalization, and financial liberalization since the 1980s. Economic globalization refers to the fact that economic resources (goods, capital, labor, technology, information and other transactions) flow from one country to another. This tendency makes connections among country’s economy around the world, and help strength the economic relationships between one country’s economy and the whole world economy. Since 1970s, financial liberalization...
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...E C O N O M I C I S S U E S 1 Growth in East Asia What We Can and What We Cannot Infer Michael Sarel I N T E R N A T I O N A L M O N E T A R Y F U N D E C O N O M I C I S S U E S 1 Growth in East Asia What We Can and What We Cannot Infer Michael Sarel I N T E R N AT I O N A L M O N E TA RY F U N D WASHINGTON, D.C. ©1996 International Monetary Fund ISBN: 1-55775-607-4 Published September 1996 Reprinted November 1996 To order IMF publications, please contact: International Monetary Fund, Publication Services 700 19th Street, N.W., Washington, D.C. 20431, U.S.A. Tel.: (202) 623-7430 Telefax: (202) 623-7201 Internet: publications@imf.org Preface The Economic Issues series was inaugurated in September 1996. Its aim is to make accessible to a broad readership of nonspecialists some of the economic research being produced in the International Monetary Fund on topical issues. The raw material of the series is drawn mainly from IMF Working Papers, technical papers produced by Fund staff members and visiting scholars, as well as from policy-related research papers. This material is refined for the general readership by editing and partial redrafting. The following paper draws on material originally contained in IMF Working Paper 95/98, “Growth in East Asia: What We Can and What We Cannot Infer From It,” by Michael Sarel, an Economist in the Fund’s Southeast Asia and Pacific Department. It has been prepared by David D. Driscoll of...
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...Population-Control-Policies and their Implications for Economic Growth in China Bachelor’s Thesis supervised by the Department of Economics at the University of Zurich Prof. Dr. Fabrizio Zilibotti to obtain the degree of Bachelor of Arts in Economics Author: Noemi Schramm Course of Studies: Economics Closing date: August 17, 2011 Abstract This bachelor thesis is giving an overview on previously performed research how family-planning-policies in China (explicitly the so-called One-Child-Policy) have affected economic growth since 1979 and tries to give possible predictions and forecasts on how it could affect economic growth until 2050 through critical model analysis. The Solow model gives theoretical answers but also yields analytical results through calculations subject to different population development scenarios (low, middle, high growth rates). The dependency ratio as a measurement of population age structure is analyzed and implemented into the Solow model to help understand the influence of family-planning-policies. It is shown that the One-Child-Policy affected heavily the last 32 years of China’s economic development and will continue to affect its future, but according to the calculations in this paper, the impact changes from a positive one to a negative one. Acknowledgements I would like to thank Professor Fabrizio Zilibotti for his supervision and for giving me the opportunity to write my thesis at his chair. Especially I would like to thank Yikai Wang for...
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...Economic Context of Management Name: Pradeep Essay: “The Australian government has been running with too large a fiscal deficit during the past 4 years particularly in light of their projections for the Australian economy which were made when the first stimulus package was announced in 2008". Discuss this assertion and the consequences of this fiscal deficit on economic activity during the past 4 years. What are the implications of your analysis for Australia's fiscal policy during the next 3 years? EXECUTIVE SUMMARY Global Financial Crisis (GFC) evolved from its origin in subprime mortgage crisis of United States and affected almost every country in the world. Australia entered into GFC with a strong position, as compared to the other OECD countries. Australian government implemented stimulus packages in order to deal with the situation. This reports looks at the consequences of the fiscal deficit on economic activity and its implications for Australia’s fiscal policy. Its direct impact on Australia was small – mostly increases in bank borrowing costs The case for fiscal stimulus was based on Keynesian model, which proposes a short term government spending to stimulate the economy during the recessionary period. However, Basic Keynesian model assumes that the exchange rate is fixed. The analysis shows that significant contributor for GDP (expenditure) was net exports over that period, not the consumption. This increase in demand was due to the depreciated...
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