Economics assignment help on: GDP of economy
Economic growth has been rendered to as the rise in the amount of gods & services available in order to satisfy the wants of the people of a particular country. Economic growth has been defined as an overall rise in the gross domestic product (GDP) of the economy. It must be noticed that, when any economy talks about growth, it takes into consideration all the factors which would help in the overall growth of the same. The ultimate growth of the economy could be ascertained by the standards of living of the population within a specified country.
With a rise in the population of the various developing countries, it has been seen that all the economies want to rise in financial terms. Each & every economy wants to attain high levels of growth covering all the sectors. In order to gain high levels of wealth, the developing countries would be required to overcome the various barriers which would help to attain growth & development (Connell & Ndulu, 2005). The rise in the population amongst the developing countries has been referred to as one of the most significant factor in determining the economic growth of a particular country. On the other hand, shortage in the labor supply would lead to a decrease in the overall growth of a particular region. Increaser in the birth rate of a particular country would stress the various renewable resources available in the same.
Based upon the Solow model, fair relationship has been framed amongst the growth in population & the levels of development of a particular country. This would be measured in terms of the levels of output, consumption levels & capital per worker. This particular essay would take into consideration the various developing countries which have shown a consideration decrease in the overall population growth & are now richer as compared to the countries that had high levels of population growth (Kruegger, 1997). It must be seen that, the developing countries that previously were low in population have been termed to be richer as compared to the countries with high levels of growth in the population.
Majority of the developing countries have an impression that, high population growth rate leads to poverty, poor health, decline in the overall standards of living, social problems, famine, ecological disaster etc. According to many economics survey’s, high levels of population growth would lead to hindrance in the growth & development of the economy (Connell & Ndulu, 2005). With an increase in the population of any given developed economy, the demand for the resources have been increased which has led to a decline in the per capita income of the same.
It shall be understood that, more number of people means more revenues would be drained by the government of the developing country which will lead to a reduction in the overall opportunities for improvements. Based upon Neo-Malthusian, an increase in the population would lead to reduction in the wages as well as the standards of living (Robet, 1956). With the help of the “Law of population”, population would be required to grow in geometric progression whereas an increase in the food supply would be arithmetic progression. This shows that there will not be a balanced growth between the rise in food & population growth (Connell & Ndulu, 2005).
The growth in the population levels in the developing countries have been done due to the dependent children. The percentages of children which are below 15 years of age are approximately 40% of the entire population (Kruegger, 1997). It must be kept in mind that, in most of the developing countries the labor force would be supported by twice the number of children in the richer countries.
It has been noticed that, growth in the population has been rendered to as one of the biggest problems which would lead to a reduction in the growth of the same. A list of total 40 developing countries has been selected. The list of the first 10 countries take into consideration, all those countries which had high levels of population growth in the 1960s – 1970s (Robet, 1956). The next 10 countries which have been selected where population growth is much lower now than in the earlier period.
Based upon the data provided by the World Bank, chart 1 showcase a scatter plot taking into consideration the two variables i.e. population growth & income per person for the ten developing countries selected. It can analyze that, the countries have low levels of population growth; the GDP per capita is quite high. Whereas on the other hand, the next ten countries selected have high rate of population growth & low GDP per capita (Ndulu, 2007). It must be taken into consideration that, counties with high population growth would lead to a stumpy levels of income. Based upon the Solow model, all those countries which have high population growth would have slow & steady high levels of capital per worker. Chart 2 depicts the countries which possess low levels of population growth amongst the developing countries with high levels of GDP per capita (Connell & Ndulu, 2005).
In order to see the relationship between the population growth as well as the economic growth, Solow model shall be practiced. This model would help in order to measure the economic growth between the countries & how a particular economy grows within that time period. Based upon the Solow model, it could be seen that there are mainly three suggestions for economic growth. The three factors are rise in the rate of savings, growth of the population & growth in the overall productivity of the economy with time (Trevorw, 1956). The second part of the question i.e. whether the countries which portrayed a decline in the overall population growth are now richer could be seen by taking consideration the population growth. This could be seen in the chart attached below.
The growth in the population has varied affects over the functioning of the economy. High growth rate in population would lead to a stable growth amongst the economy. Secondly, rise in the population level of the economy would be able to determine the rate at which savings is being done. This would help in order to widen the capital. An overall growth in the population would lead to high levels of growth in the employment market (Ndulu, 2007). Therefore, in order to have a better relationship between the investment made & the workforce employed for a particular task. It can be noticed from the chart that, an enhancement in the rate of population for a particular economy would lead to an upward shift in the levels of population. The Solow model would help in order to represent population growth which would further lead to a decrease in the standard of living (Connell & Ndulu, 2005). Hence, policies shall be suggested by the government which would help in order to improve the standard of living.
It shall be noticed that, one of the country which has reduced its population growth & has led to growth in the economy is China. It has been noticed that, an increase in the levels of population has led to one of the major problems in the overall growth of the economy. It has been noticed that, China has done many innovations or achievements in the last 50 years with a limited level of population. The total population of China has been estimated to be approximately 1,285.2 million (Todaro, 1987). The rate at which population has been increasing is 0.6 & has been ranked third largest country on the basis of the population levels.
The per capita parity rate has been increased from $530 to more than $3000 in a specified time period. In the year 1979, China underwent the “one child policy” so as to control the birth rate in the country. This policy stipulates the population to have only one child. With the implementation of such a policy, the rate of population has been decreased approximately by 0.7% (Ndulu, 2007). It has been noticed that majority of the African countries have high rate of population growth whereas the per capita income is quite low (Mason, 2003). Due to lack of health care amenities, employment & education the African countries are always in debt. These countries have to pay certain amount as a part of the service charges. Based upon one of the reports, it has been seen that African countries are bound to pay approximately $300 billion to many of the creditors belonging to the foreign countries (Connell & Ndulu, 2005). Hence, in order to improve the overall situation of the country (Africa) large amount of exports have been practiced. This would help in order to handle the situation as well as provide better amenities to the target population. Africa has been termed to one of the most unsustainable countries due to lack of food, high poverty levels, population growth etc. It has been referred to be one of the most undernourished continents all over the globe (Kruegger, 1997).
In conclusion, in Solow model, higher population growth lowers the level of output per person. In other words, countries that showed a substantial decline in population growth are richer now than countries where population growth is still high. From 1960 to 2008, the slower population growth rate countries, such as China (Mishkin, 2012), Indonesia and Malaysiahave lots of achievements on their economic growth. However, Pakistan, Nigeria and Iran as the fastest population growth rate countries, if not control their population growth, the economic recession is hard to avoid (Connell & Ndulu, 2005). Economics problem is complicated and population growth is only one of the most important influence factors to the developing countries become rich. As developing countries, they not only should pay attention to their population growth problem, but also should take full advantage of labor and capital.
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