Economics Essay Example | Topics and Well Written Essays - 1500 words - 5

Economics - screen ExampleThe works by Prebisch (1947 1949) and Singher (1950) attempted to inform economic harvest-time based on the differences in products produced by different nations. The less developed nations according to these theories have to purchase the manufactured goods from the Northern nations at footings in excess of what of what they get for selling their primary goods (to the Northern nations). This ultimately adversely affects the economic growth of the less developed nations and thus they remain less developed (Todaro, 2003). These theories thus argue for promoting import-substituting policies for economic growth. option theories by Harrod (1939) and advanced by Kregel (1980) capture the dynamics of economic growth by assuming that it is intractable endogenously by the saving and investment decisions of firms. In this model, the growth rates put forward argon actual, warranted and indwelling growth rates. Based on this approach, the long run growth rate is determined by the closed in(p) economy social saving rate rather than net exports. However, this model has been criticised for showing the possibility of dubious growth in a capitalist economy (Moudud, 2000). It has been shown that though there can be asymmetry to some extent for the growth path, its extent is restricted by many endogenous factors in a capitalist economy (Moudud, 2000). 3. Conclusion In this essay, the discussion shows that low savings rate alone cannot explain the differences between developed and developing nations. By improving saving rates alone, developing nations cannot catch up with the West. Many other factors discussed above determine the differences between these nations. 1. Introduction The relationship between isolated barter and economic growth has been a topic of debate for the academicians and policy makers in the recent years. In this essay, the arguments for and against free trade are discussed. 2. Arguments for and Against Free Trade Greater a vailability of cheaper goods from abroad will lower the national price level, since the consumption bundle used to compute broad inflation measures includes imported goods. The magnitude of this cause depends on the share of imports in the consumption bundle of the representative household.Also as the economy opens up the shocks to the price level due to the domestic farm sector output fluctuations are likely to ease which whitethorn diminish the price fluctuations (Jin, 2000 etc). As per the Dutch disease hypothesis (Collier and Gunning, 1999) and the political economy models (Alesina and Perotti, 1994), trade nudeness can affect fiscal deficits through the instability of government revenue. First, countries with an outward-looking strategy have higher levels of competition, are less corrupt (Ades and Di Tella, 1999) and have higher fiscal balances and lower fiscal deficit. Second, trade openness increases income inequalities which enhances the take away of public goods (Alesin a and Perotti, 1994) and, simultaneously, reduces the ability of governments to collect taxes. Third, trade policy could reduce government revenue in the go around run (Bean, 1999), which could occur when increases in openness result from a reduction in tariffs. However, for a given over level of tariffs, government revenue from taxes is an increasing function of trade openness. Thus, in the