...How the UK economy has evolved and changed since 1970 Over recent decades, the structure of the UK economy has undergone significant transformation and experienced changes that go hand in hand with the process of economic growth and development. In the primary sector which Includes activities directly related to natural resources, e.g. farming or oil extraction, changes in resource availability initiated structural change, as happened so dramatically with oil in 1973 and again in 1979. Oil has had further indirect effects on the structure of the UK economy by means of the exchange rate. The development of North Sea oil production enabled the UK to be self-sufficient in oil by 1980, but also bestowed ‘petro-currency’ status on the pound. This meant that the sterling exchange rate was now responsive to changes in oil prices, which between 1979 and 1983 tended to keep the pound higher than would otherwise have been the case. The oil crises of the 1970s heralded the onset of long-term (youth and adult) unemployment and the decline of the domestic manufacturing sector. The overall downsizing and restructuring trend that followed was particularly noticeable in the manufacturing sector of the economy: a large proportion of operations that were traditionally carried out “in-house” were either contracted out or exported to areas of the world that offered substantially lower labour and/or running costs (Matlay, 2001). Throughout the 1979-1997 period, general and specific support aimed...
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...forcing the technology mechanism and changing the structure of production towards activities with higher levels of productivity. The evidence show that during 1970s and 1980s there were of structural changes in economic activities where developing countries enters the global markets. In his preface, Giplin (2001; xi) point out that “…important step toward the creation of a truly global economy, since the mid-1980s the world has also witnessed the extraordinary growth of economic regionalism as a countermovement to economic globalization.” Similarly, Magdoff (1992; 50) state that “In fact, capital exports have helped shape the evolving global economy ever since the end of the Second World War”. Moreover, Glyn and Sutcliffe (1992; 79) point out that “…left the world economy leaderless in the 1970s and 1980s with increasingly open economies disciplined by market forces, but without a unique center of gravity.” This implies that global economies forces t To provide a well-structured discussion, this essay will begin by briefly introducing into how neo-liberalism in the mainstream of development thinking greatly achieve its victory of defence mechanism for a new wave of market orientation intervention, before discussing the structural changes. It will then provide explanation on how these structural changes resulted to globalisation. It will also examine the economic policy making implication of the state in general. It will then conclude by looking at the practical outcome experience by...
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...State that there are mainly 3 causes of unemployment in Singapore. Cyclical unemployment in Singapore State Cyclical unemployment is related to the business cycle. Elaborate During an economic downswing (recession or depression), aggregate demand decreases and firms find they cannot sell all their current output, and stocks pile up. Firms will then adjust to the deficiency of demand by cutting back on production and reduce workers, leading to an increase in cyclical unemployment. Exemplify Over the last 2 decades, recessions or economic slowdown have been largely triggered by external shocks to our economy such as the Asian Financial Crisis in 1997/98; global dotcom crisis in 2000/01; September 11 terrorist attacks in 2001; the SARS epidemic in 2003 and most recently the Global Financial Crisis (US sub-prime mortgage crisis) in 2008/09. The economy went into sharp contractions as a result of these external shocks. These shocks badly affected our export trade with the rest of the world, tourism and international banking as well as financial services sectors. In short, it hit our export revenue (X) and investment (I) components of AD causing domestic output to fall. And since exports from Singapore are dominated by high-end manufactured goods and services which tended to have a high income elasticity of demand, falling global income could lead to a more than proportionate fall in demand for Singapore’s exports and hence have a pronounced adverse effect on Singapore’s...
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...4+5 4. Australia’s Trade Policy page 5 3.4 Trade Liberalization and Protection in Australia page 6 3.5 The Australian Dollar page 6 3.6 SWOT (Strength, Weakness, Opportunities Cost and Threat) Analysis page7 3.7 CBA for Structural Reform page 8 4. Conclusion page 9 5. Recommendation page 9+10 6. Reference page 11 1. Executive Summary The purpose of this report was to analysis present of Australia’s trade position and prepared a plan for improving Australia’s position. Specific objectives were to identify key economic problems in term of trade and current account. Problems and solutions were found in the trade and current account though Carbon tax with high Australian dollar is likely to force radical structural reform on the economy and the manufacturing. The report recommends using structural reform to improve Australia’s trade position. Furthermore, Carbon tax initially acts against competitive international trade. In the long term, it can offer solutions to the two sector economy. 2. Introduction Since the onset of the East Asian economic and financial crisis in late 1997 the Australian economy has continued to record strong growth, despite many of Australia’s Asian major trading partners (MTPs) experiencing recession and a consequent slowdown in world economic growth. Therefore, this report will prepare a plan for improving Australia’s trade position...
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...introduction Hong Kong is one of the fastest growing economies in the world. It is also one the four Asian Tigers. Aim of this paper is to find out how Hong Kong’s “positive non-intervention” policy and rules-based approach applied in the practice and how it helps Hong Kong achieve enormously success. The factors account for the success of Hong Kong economy are that openness and freedom from foreign exchange rate and fiscal policy, reasonable economic policies, and non-interventional approaches to economic policymaking, and high trade volume. Even though government plays a minor role during the structural transformation and economic growth, it does not mean that government’s role is not important. In fact, government’s approaches help Hong Kong succeed in many ways. The first part of the essay will review brief background when Hong Kong was under British governance in 1950s and 1990s. Second part of this paper will investigate the rise of manufacturing in Hong Kong and during 1950s and 1960s. Third part of this paper will focus on the change in type of manufacturing during 1970s. Fourth part of this paper will examine the rise of financial sector in Hong Kong during 1980s to 1990s. In each of the periods, government’s impact on the economy will also be discussed. Hong Kong’s economy miracle between 1950s and 1990s is an excellent economic model to learn from for the rest of the world. Hong Kong government’s hands-off approach would also give guidance of economic development...
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...its trade deficit. At current exchange rates, the strength of the U.S. economy, combined with slow growth in demand in many other parts of the world, will lead to further widening of the U.S. trade deficit. How long can the trade deficit continue on that trajectory without disrupting the U.S. economy or the world economy? Absent structural reforms in the United States and abroad, a large devaluation of the dollar, or significant changes in the business cycle, both the trade and the current account deficits will continue to widen until they become unsustainable, perhaps two or three years out. Changing the trajectory will be difficult. The U.S. trade deficit is now so large that even if world economic growth were to pick up and boost U.S. exports, U.S. imports would have to slow dramatically for the gap to narrow. To shrink the trade deficit significantly, say, over a two-year period, exports would have to grow twice as fast as they did in the 1990s, when growth averaged 7.5 percent a year, and the growth rate of imports would have to be halved, from 11 percent to 51/2 percent a year. Moreover, following twenty years as a net recipient of capital inflows, the United States will soon be confronted with much larger service payments. At some point, either the United States' negative net international investment position and the associated servicing costs will become too great a burden on the U.S. economy or, more likely, global investors will decide that U.S. assets account...
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...legal economy as an underemployed dock worker at the port to then permanently working in the illegal drug centered economy. There are specific key structural and key cultural elements in Wilson’s model that are relevant to Nick’s decision. Nick is a cautious young man who lives and works in Baltimore, Maryland. This is a predominantly white urban neighborhood where blue collar employment previously dominated and has transitioned into an overpowering white collar economy. Nick is employed by his uncle, Frank Sobotka, on Baltimore’s diminishing waterfront. Throughout the season, Nick is continuously trying to keep his thoughtless and irrational cousin, Frank’s son Zig from danger with the illegal drug centered economy. In addition to loading and unloading cargo vessels at the port, Nick is engaged in his Uncle Frank’s smuggling operations by relaying information between “The Greeks” and his Uncle. Nick and his girlfriend, Aimee, who works as a hairdresser, have a little girl together but cannot afford to live together due to their lack of steady income. In episode three, Aimee voices her concerns with Nick as she is cutting his hair that they need more money and that they are not married or living together. This creates pressure for Nick because he is finically strained due to the lack of work and his lower seniority in the union at the ports. His frustrations with work are relevant to the structural factors mentioned in Wilson’s model. These specific structural changes impact...
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...Pros and Cons of Liberalisation , Privatisation and Globalisation (LPG) , LPG in Developed and Developing Countries LIBERALISATION The main aim of liberalisation was to dismantle the excessive regulatory framework which acted as a shackle on freedom of enterprise. Over the years, the country had developed a system of “license-permit raj.” The aim of the new economic policy was to save the entrepreneurs from unnecessary Harassment of seeking permission from the Babudom (the bureaucracy of the country) to start an undertaking. Similarly, the big business houses were unable to start new enterprises because the Monopolies and Restrictive Trade Practices (MRTP) Act had prescribed a ceiling on asset ownership to the extent of Rs. 90 crores. In case a business house had assets of more than Rs.90 crores, its application after scrutiny by the MRTP Commission was rejected. It was believed that on account of the rise in prices this limit had become outdated and needed a review. The major purpose of liberalisation was to free the large private corporate sector form bureaucratic controls. It, therefore, started dismantling the regime of industrial licensing and controls. On April 14, 1993, the Cabinet Committee on Economic Affairs decided to remove three more items form the list of 18 industries reserved for compulsory licencing. The three items were: motor cars, white goods (which include refrigerators, washing machines, air-conditioners, microwave ovens etc.) and raw hides...
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...Goals of Macroeconomics Macroeconomics is the study of the economy as a whole. Macroeconomics is concerned with such major aggregates as the household, business, and government sectors; in addition to measures of the economy such as inflation rates etc. Macroeconomic Issues The macroeconomic issues that will be examined during this course are: 1) Economic Growth (change in the level of output) a) An outward shift in the PPC (production possibilities curve) due to an increase in the quantity or quality resources. b) An increase of real output (gross domestic product) or real output per capita. NB: Gross domestic product is the market value of all final goods and services produced within an economy for a given period. 2) Unemployment: The failure of an economy to fully utilise its entire labour force. 3) Inflation: A rise in the general level of prices in an economy. 4) The Balance of Payments: A summary of all the transactions that took place between the individuals, firms and government units of one nation and those of all other nations during a year. 5) Exchange Rates: The rate of exchange of one nation’s currency for another nation’s currency. A foreign firm would look at some key macroeconomic indicators so as to inform its decision as to whether or not it should invest in a particular country. These key macroeconomic indicators are: 1. Real Gross Domestic Product (Real GDP) 2. The unemployment rate 3. The inflation...
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...Key Definitions Computable General Equilibrium (CGE): A model, which utilizes actual economic data to estimate the impact of external shocks (e.g. policies, technology) to an economy. Gross Domestic Product (GDP): The total monetary value of all officially recognized final goods and services produced within a country in a specific time period. It is used as a key measure of economic growth. Gini Coefficient: A statistical measure of the income distribution of a country’s residents. It helps to identify the gap between the rich and poor. Total Factor Productivity (TFP): A measure, which represents the amount of output not directly related to the amount of inputs (e.g. materials). Economic planners look at these factors to explain growth of a corporate or national economy. Main Facts Hofman & Kujis argue that economic growth in China is not only reflected by GDP growth but also its sustainability should be considered. China’s economic growth has been exceptional, as it has lifted millions out of poverty. Overall, the Chinese population has prospered greatly, however the Gini coefficient indicates that there is a significant income disparity. Furthermore, the Chinese economy is heavily dependent on the manufacturing industry, investments and external demand. These three cause multiple negative externalities for the nation, such as environmental pollution, dependency on foreign resources due to high-energy consumption and income inequalities that cause social...
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...and Katherine Terrell This paper analyses the transition process from centrally planned to market economies and focus on analysis of interaction between institutions and structural change process. Paper focuses more on reallocation of labour. It also analyses and finds explains that how central and eastern Europe is different in the transition process and reallocation of the labour. During the initial phase of the transition, employment had to flow out of state-owned heavy industry into new, private and small-scale business sector. The extent of effectiveness in labour reallocation can assess to the success of transition in a given country (Boeri and Terrell, 2002). The authors compares the patterns of labour market adjustment trajectories across countries and time, found that countries from central and Eastern Europe differs substantially from the economies of the former Soviet Union in several aspects; asymmetries in the responsiveness of employment to output change, the extend of real wages decline, structural change of employment, Unemployment dynamics and its duration and degree of wage dispersion. They further provide a reason behind different adjustment trajectories is that different models of social policy adopted in two groups of countries. In CEE, non-employment benefit was initially set at relatively higher level than in FSU. Given the need of structural change of employment, countries of CEE would be more successful by adopting employment quantities adjusted...
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...possible by the reserve currency status of the US dollar. “This excess demand resulted from both the public debt” and “the overconsumption by households.” (Lin 2012, Treichel 2012, p.3) “As shock waves of the global financial crisis (GFC) reached East Asia in autumn 2008 immediately after the collapse of Lehman Brothers in September, the region faced the task of evaluating and reassessing the economic cooperation efforts of the previous ten years” (Katada 2011, p.274) Thus by evaluating and reassessing the economic cooperation of those previous ten years East Asia was able to maintain its flexibility during the Global Financial Crisis. The aim/purpose of this assignment is to show how the Asian economies have performed during and after the Global Financial Crisis, in relation to the structural transformation, in the role of the state/government, businesses, labour relations and regional...
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...It can also be used to describe the change in the industry such as in the growth of the service subdivision to the detriment of the agricultural sector. According to World Economy and Social Survey (Anonymous, 2006), for economic growth to take place structural change is a requirement. This increase can stay accomplished by adopting and using existing technologies, replacing imports and entering into the global markets for manufacturing goods and services and through the rapid accumulation of physical and human capital. In the developing countries, such as in Sub-Saharan Africa, there has been a lack of structural change taking place as opposed to the industrialised regions of the globe. Therefore there seems to be a difference in the growth process between the industrialized countries and the developing world. Technological innovation, for instance, is a structural change which continues to be more concentrated in the industrialized world although it is brought to developing countries by external forces such as MNCs which consequently have control over the...
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...Is Inflation in India Structural or Monetary? Inflationary Situation: It’s a situation in the economy where ‘too much money is chasing too few goods’. So when the products & services available are less as compared to the money supply in the money market, the economy witnesses an uptrend in their prices in order to adjust for the larger quantum of money chasing them. Structural Policy: A Structural policy is a term used for the whole of the politico-economic measures for the organization of the structure of the national economy of a state. A Structural policy is further categorized as * Regional structural policy, which supports the settlement of industries in assisted areas by measures of the investment assistance * Sparkling wine-oral structural policy, those by subsidies and tax preferences Monetary Policy: It refers to the process by which a country’s central bank controls money supply, often through the manipulation of interest rates, with the aim of promoting economic growth and stability while maintaining relatively stable prices and low unemployment. Monetary policy is either expansionary (mainly by lowering interest rates to combat a recession or a recessionary situation) or contractionary (raising interest rates to control inflation). Comment: Inflation in India is primarily structural and less monetary in outlook. Some data points supporting this point of view are as below: * Food Inflation – As it has been seen historically, the dietary patterns...
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...5 Frictional unemployment is important to have in the economy because it allows individual with skills and competences a better opportunity at finding jobs. Frictional unemployment is important because it matches the demand for employees with supply and brings stability in the labor market. (Goodwin N.) Frictional unemployment only assists those who are jobless and are looking for work. Those that are employed and are looking for a new job are not counted under frictional unemployment. Frictional unemployment exists due to the disparity between characteristics of supply and demand job markets. Some of the characteristics of disparity are skills, locations, attitudes, payments, work timing and more. (Farnham P.) Frictional unemployment is established in a rapid-pace economy that is flexible, expanding and adaptable within the work force. Most economists believe that frictional unemployment is a sign of economic well being. Frictional unemployment supports employees as they allow them to seek jobs they like best. (Goodwin N) Frictional unemployment benefits the employers by allowing them the opportunity to select among the most talented. Frictional unemployment is mainly for individuals that are just leaving college and those that are unemployed due to changing of jobs. Frictional unemployment decreases the availability of talent to companies, and gains in turnover, but losses to productivity and the economy as a whole. When individuals delay re-entering the work...
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