Essay Example on Economic Growth Rate

The economic growth rate offers a vision into the overall magnitude and direction of progress for the general economy of a country. Simply, an economic growth rate is a measure of economic development for a given period to another in terms of percentage. The growth rate does not infer for inflation but conveys in nominal terms. Practically, the measure of the rate of change that a country's Gross Domestic Product (GDP) goes through in a given year to another. Occasionally, the gross national product is used when a state's economy is deeply reliant on foreign earnings. The paper, therefore, discusses economic growth rate in different countries such as Japan, United States, China, and Ethiopia over the last 20 years.

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The United States has the biggest economy in the world. Nonetheless, in the last twenty years, just in the case of several other industrialized nations, its economic growth rates have gradually been decreasing. During the 1950s and 1960s, the average growth rate was over 5 percent, but in the last two decades that have not been the case. America has seen its economic growth rate decreased over the last years. The average growth rate of United States economy is roughly 2.5 percent. Japan is a developed nation with a free market economy of the third largest in the world. The economic growth rate history of Japan in the last four decades can be categorized in two ways: after and before 1990. In the initial period of 1990 gross growth rate developed at a yearly rate of approximately 4.5 percent, and was persistent (Mankiw, 2009). The trend clogged sharply in the 1990s, where averagely in the last twenty years growth rate is 0.9 percent. Ethiopia is one of the poorest countries in the world yet they have a healthy growing economy. In 2013, it had an annual rate of 13.92 which was the highest in all time. Averagely, the last twenty years has seen it have a growth rate of 10.56 percent that is a significant number in the sub-Saharan Africa. China has emerged as an economic powerhouse in the last few decades. The growth rate is estimated at 1.91 percent from 2010 up to 2015 with an all-time high growth rate of 2.50 in 2011. Averagely it has a growth rate of 5.12 percent in the last twenty years (Mankiw, 2009).

Some of the differences between these countries that have resulted in diverse economic growth rates are discussed herein. The technological factor is very core to influence the economic growth of these states; it is the engine of economic development (Fagerberg, 2011). With the quick technological advancement, it is simple to generate new jobs, construct vast industries, and enhance living standard. Moreover, technology is an influential tool for putting the government more effective and efficient, coordinating economic development and environmental purposes, offering a foundation for military and economic durable development. Their difference in economic growth has been brought by the quality of governance. The governance has a role in delivering essential social environment and infrastructure for economic expansion of the entire society. These countries have a different form of governance that sparks economic development. Good management will help facilitate economic growth in the countries.

The United States has distinct government policies that have allowed it economic growth. First, the policy on the right or democratic governance is believed to be one of the major causes of its economic growth. Democratic governance plays a critical role in growing economic development through the policies implemented and issued by governments (Mankiw, 2009). The manner in which market-friendly guidelines are created and then executed encompasses political progressions not sufficiently apprehended by theoreticians of democracy, economics, and those who would link democratic governance to economic growth. Active management is an essential for establishing the cohesive policymaking capability that is desired to initiate sustainable development. The second emphasis that U.S is putting in place is education. A country that is less educated can never have any form of economic growth that is very high. Emphasis on education will provide the state with necessary expertise that is required in different fields to spark economic development. Ethiopia has distinct government policies that have seen the recent increase in economic development. There is the diversification of economy system as well facilitation of economic systems to avert massive reliance on resource wealth (Arve, 2014). Balance on the long-term and short-term development priorities is also highly emphasized by the Ethiopia government to foster its economic development. China, on the other hand, has its policies that are aimed to increase economic development. It has five development plans that are aimed for economic. The plan is backed by policies to encourage the growth of novel technologies. There is also policy on urbanization to transform the country to a better open economy and market-oriented. Japan has distinct policies on the role of technology as well as market investments for economic growth.

In conclusion, different countries have diverse economic growth that is contributed by various factors. As listed above, democratic governance, new technological advances as well government policies play an essential role in economic growth in these countries.

References

Arve, H. U. (2014). Emerging Economies and Challenges to Sustainability: Theories, Strategies, Local Realities. London: Routledge.

Fagerberg, J. (2011). Technology and international differences in growth rates. Journal of economic Literature, 47-75.

Mankiw, G. R. (2009). A contribution to the empirics of economic growth. New York: National Bureau of Economic Research.