Economic Complexity (EC) is defined as the complete measure of the production of a country, to understand the economic growth of a nation. This measurement is dependent on the country's diversity, the ubiquity of products, per capita income and the product space. These metrics, help measure the country's exports to provide the Economic Complexity Score, which helps explain the difference in the level of income of countries, and it predicts future economic growth. The primary purpose or goal of EC is to explain the economic system of a country as a whole. The model answers the central question of what a country's economic growth projections are. Some other problems embedded in the issue that the model is trying to explain is- What are the imports …show more content…
For example: Take it that Netherlands exports X-ray Machines, Medicines, Frozen Fish, and Refined Petroleum. Argentina exports, Frozen Fish, Bananas, and Corn. Brazil exports Frozen Fish and Corn. As the diversity of the country is measured in terms of the products the country is connected with, Netherlands' diversity is 4, Argentina's 3, and Brazil's 2. Ubiquity, on the other hand, is related to the number of countries a product is connected to. Considering the same example as before, the ubiquity of frozen fish is 3, that of corn is 2, and that of X-ray Machines, Medicines, Bananas and Refined Petroleum is 1. Diversity and Ubiquity are thus related in such a way that, diversity can be used to correct information that ubiquity conveys and vice …show more content…
There is a strong co-relation between Economic Complexity and the Per Capita Income that countries generate. To help understand this relationship better, take for example China and Thailand. The two countries have high levels of economic complexity but low levels of per capita income. The low per capita income with high economic complexity indicates that these countries are rich because of productive knowledge. When it is the opposite, i.e., countries have low economic complexity and high levels of per capita income, the countries are rich not because of productive knowledge but due to the large volumes of natural resources. The economic complexity thus affects the country's per capita income and drives its future
economy is one of the major things that determines the power and the strength of a country.
...conomically beneficial trade and technology development. In this regard the Epilogue uses sound logic to plausibly answer the wealth question. On the other hand, Mr. Diamond uses the same "national competition" thesis to purport that Asia's large, centralized governments were conspicuously growth-inhibitive. This argument would not seem to pass muster given what we have learned about the role of governments. Professor Wright's slides state that "Centralization may limit predation and even allow for growth" as "centralized predation = incentives to maximize the haul " This clearly refutes Mr. Diamond's argument that centralized, monopolistic Asian governments impaired societal advances. Thus, Guns, Germs, and Steel can scantly explain why China and the Middle East remain emerging markets while Western and Northern Europe enjoy significantly larger national wealth.
Efficiency is concerned with the optimal production and allocation of resources given existing factors of production while equity is concerned with how resources are distributed throughout society (Pettinger, 2010). The equity-efficiency trade-off is an economic situation in which there is a perceived tradeoff between the equity and efficiency of a given economy. This tradeoff is commonly viewed within the context of the production possibility frontier, where any additional gains in production efficiency must be offset by a reduction in the economy 's equity. Within this equity and efficiency tradeoff, equity refers to the economy 's financial capital, while efficiency refers to the future efficiency in the production of goods and services. This theory asserts that, in order for a nation to
The purpose of economic indicators is to provide for researchers and analysts the ability to interpreter economic data. Economic indicators are the main source of prediction of market behavior. They are also detailed explanations of how to analyze various changes over a business cycle.
The economy of a nation is a major indication of its success. One aspect of a nation's economic success or failure is the system of government. Whether a nation is socialistic, communistic, ruled by absolute sovereignty, or based on capitalistic principles can be a key factor in a country's economic success or failure. Government is the foundation of an economy but it is not what determines its success. Issues that determine a nation’s economic success include growth strategies, improved or increased resources, investment and savings, government policies, trade, foreign direct investment, income distribution, labor allocation, innovations in technology, and several other economic issues. I feel that economic growth is the main indicator of economic success. Additionally, innovations in technology, improving human capital, and improving foreign direct investment (FDI) are three issues that can lead to economic growth.
What is complexity? How does it differ from complicated issues? Complicated systems are exactly what Microsoft Word said. They are multifaceted and intricate. They have several parts, but there is only one determined way for these systems to work. This means that a change in one area will always create a change in another area, because the parts are connected in a predictable manner.
Diversity can be defined as the act of being different in any given situation and happens
It examines the characteristics of the economy output, employment, inflation, and the interest rate. Few of macroeconomics indicators includes inflation, public deficits, and unemployment. “Macroeconomic indicators share important characteristics that set them apart from other indicators, such as those covering human rights or government transparency (e.g. Cooley and Snyder 2015).” Macroeconomics focuses on the economy between businesses and individual household. When the economy is operating at its natural level of employment, there could be an increase in unemployment. “The rate of unemployment consistent with the natural level of employment is called the natural rate of unemployment.” When Business experiences a decrease in production, it may generate additional unemployment. Another goal of macroeconomic is economic growth, which is defined as a long-run process that occurs as an economy’s potential output increase.
Diversity: It is the representation of the population with diverse cultures, customs with different social background.
This is what I would like to investigate in my extended essay by using economic tools, such as the Production Possibility Curve, Demand & Supply Diagrams, Aggregate Demand and Supply Diagrams, export and import analysis and exchange rate analysis.
Many factors can lead to the underdevelopment of a country. The most common sign of underdevelopment is that of a “Dual Economy”, this takes place when a “small modern elite and middle class make up about 20-30% of a country’...
Every year there is a ‘league table‘ published showing the level of economic growth achieved by each country. The comparison is made using each countries Gross Domestic Product, or GDP. An important factor to look at is the difference between actual and potential economic growth. Actual economic growth increases in real GDP. This increase can occur as result of using previously unemployed resources, or reallocating resources into more productive areas or improving existing resources. Whereas potential economic growth is the productive capacity of the economy. For example, it can be shown by the predicted ability of the country to produce goods and services. This changes when there is an increase in the quantity or quality of the resources. All countries have different ways of achieving this with the resources they have available to them. For this reason it party answers the question of why some countries are richer than others. It is widely thought that the productive capacity of an economy will increase each year largely due to improvements in education and technology. This will obviously differ from country to country. For example, in the UK the quality of fertilizer could be improved, hence forth increase the years fruit and vegetable output.
In the world today, there are several different economic systems. Usually, the majority of countries will implement either a Capitalistic, Socialistic, Communistic, Traditional, or Mixed economy. Over the course of history, economists have studied several nations and the way they function. Certain systems are newer than others, and some are more successful than others.
Economic growth is one of the most important fields in economics. In current generation economic is developing well. Economic growth is really important to country and for the world as well. Economic are one of the identity for country because it shows a country development and attraction for other countries (F, Peter. 2014). For example well economic develop such as Singapore, Dubai, New York, and Japan. These countries are well develop and maintaining their economic growths. Economic growths are really important because higher average incomes enables consumers to enjoy more goods and services. Then, lower unemployment with higher output and positive economic growth firms tend to utilize more workers creating more employment. Enhanced public
However, the GDP of country growth too rapidly also will negatively affect such as inequality of income increases to a significant level. This problem frequently facing due to economic development. This will let the rich people are getting more richer and poor are becoming poorer. Next, the economic develop rapidly also will increase of pollution rate. This is because the country is producing the maximum output for fulfilling the demand of the consumer. This will let the country has negative consequences for the environment and health of citizens is