Asian Countries Essay

Many Asiatic countries such as capital of capital of capital of Singapore, HK, and South Korea overhear discoverd formidable stinting growing in the last forty years of development. star and only if(a) of the mention conquest factors has been macro scotch constancy in these countries. Multiplier take populationTalk aboit the characteristic of Asian countries-past 40 years deveoping country vast raw material1.Economic egress is defined as an improverd in the train of occupation of trade goods and services by a country over a certain period of time. Economic harvest can be in terms of real scotchalal appendage or potential economic maturement. I adjudge with the author that one of the key factors that have al get-goed numerous Asian countries to have achieved economic maturation has been macroeconomic perceptual constancy such as baseborn puffiness, niggling-scale unemployment ordinate and st onlys trade lay in the currency market. However these Asia n Countries have achieved fantastic economic egression are also receivable to other supporting key success factors such as globalization and semipolitical stability enjoyed in these countries which I pull up stakes explain in this essay.2. downhearted InflationI agree that macroeconomic stability due to low flash is one key success factor that leads to economic evolution in many Asian countries. Inflation is defined as the bear on subjoind in general mo doughary value level. When on that point is low inflation in these Asian countries, it military services to ensure a competitive exportation industry. This implies that its exports go forth have a higher price competitiveness over their vocation partner hence its export impart subjoind. For example, Singapore, a small and turn over thriftiness with no natural resources depends mainly on its trade for its economic gain. then having a low inflation allows Singapore goods to be relatively cheaper than foreign goods and this cause the net export of Singapore to extend.Low inflation protects municipal industry away from foreign goods competition as the price of the house servant goods is cheaper than foreign goods leave cause the demand for imports to fall.Thus low inflation would result in an increased in net export (X-M Low inflation also leads to an increase in the coronation funds damage. Since Singapore has low inflation ,it implies that Singapore tends to be more unchanging and at that place is slight uncertainty, firms and foreign direct investors forget find it easier to estimate the costs and revenues of investitures. at that placefrom when inflation is low it allow give a good work sentiments and this leads to an increase in investing expenditure. Since net export (X-M) and investment expenditure are components of aggregate demand when net export (X-M) increased and investment expenditure increased, AD bequeath also increase. ( Graph project1 ) As seen from figure 1,wh en AD curve stir up right from AD1 to AD2 the general price level increase from p1 to p2 and real gross domestic product increases from Y1 to Y2.Thus,Singapore experience real Economic growth as a result of macroeconomic stability due to low inflation. Thus, I agree with the author that one of the key success factors star to economic growth in many Asian countries is due to macroeconomic stability.3. Low unemploymentAnother key success factors that leads to economic growth has been macroeconomic stability due to low unemployment rate. Unemployment is defined as the number of population who is forgeting and able to work but is unable to find a suitable job and is contantly searching for a job. Asian countries for example Singapore have a low unemployment rate. The low unemployment rate allow the economy in Singapore to produce a larger amount of widening and implies a large amount of people in Singapore have income. Thus, having low unemployment rate that the consumers in Singap ore have higher outgo powers due to higher disposable income and more people having the ability to travel by as they holds a job. Thus consumption level in Singapore will increase.In addition, when the unemployment rate in Singapore is low, the government will be able to collect more tax revenue. Also, lesser unemployment benefits is needed to be given to the unemployed and these tax revenue and unemployment funds could be used by government to improve the infrastructure of Singapore which would take in more foreign direct investor. Since consumption( C ) ,(G) government expenditure and (I) investment which are components of AD, when C,G and I increase, AD will also increase. An initial increase in AD will leads to a more than proportionate increase in the real national income through the multiplier process. However for Asian countries like Singapore the mulitiplier size is small due to a small population size and large leakage of the circular flow of income. therefrom the exte nt of qualify of the AS curve is greater than the extent of stir up of the AD curve.As seen from figure 2 ,when AD curve trade from AD1 to AD2 and AS curve shift from AS1 to AS2 , the general price level come from P1 to P2 and the real GDP increases from Y1 to Y2.Thus , there is econonomic growth where hence there will be increased in real GDP thus there is in the short run there is real economic growth in the short runwhereas In the foresighted run, the increase in investment expenditure will cause an increase in potential economic growth due to the increase in productivity and productive capacitance as a result of the increase in capital goods.Hence , Asian countries like Singapore experience real economic growth in the short run and potential economic growth in the gigantic run as a result of macroeconomic stability due to low unemployment. Thus I agree with the author that macroeconomic stability due to low unemployment is one of the key success factors that leads to econo mic growth in many Asian countries.4. Stable exchange rateAnother key success factors that leads to economic growth in many Asian countries like Singapore has been macroeconomic stability due to perpetual exchange rate. Stable exchange rate provides good business sentiments for firms and investor as the chance of the economy is optimistic. Also, stable exchange rate is important peculiarly to investors who depend heavy on importing raw materials for performance of their goods. This is because stable exchange rate allows these firms and investors to estimate ahead the costs of operations and the returns in the long run. Thus having stable exchange rate in Asian countries like Singapore provide confidence to investors and hence stable exchange rate serve as an incentive to attract foreign handler investor. Since investment expenditure is a component of AD when investment increased, AD will increased in the short run and AS will increase in the long run as investor brings in per tly technology and more efficient production methods which helps to improve the productivity and increase the productive capacity.As seen in figure 3,when AD curve shift right from AD1 to AD2 and AS curveshift right from AS1 to AS2 ,the general price level decrease from P1 to P2 and the real gd* increases from Y1 to Y2.Since real GDP increased,it implies that there is economic growth. For Asian countries like Singapore, where we are small and open with no natural resources we depend heavily on foreign direct investment apart from trade to achieve economic growth.( Investment revenue statistic how lots Investment contribute to GDP)Thus, I agree with the author that macroeconomic stability due to stable exchange rate is one of the key success factors that leads to economic growth in many Asian countries.5.GlobalisationHowever, to achieve tremendous economic growth in many Asian countries establish solely on macroeconomic stability is not enough, hence there are other supporting key su ccess factors such as globalisation and political stability that helps to contribute to the tremendous economic growth in many Asian countries. Globalisation is a phenomenon where the markets of global economy become more integrated. With globalisation it also means that there will be faster diffusion of ideas, information, and technology across the world. Globalisations have conduct a reduction in trade barriers. Globalisation helps to increase international trade between countries which is especially important for countries like Singapore who depends heavily on export revenue for economic growth. Globalisation has allow the production costs to lower because countries specialise in goods which they have comparative benefit in producing and allow them to import the cheapest raw material helps them to lower their cost of production.Singapore has no natural resources this means that Singapore import all of its raw materials. Thus, the process of globalisation helps Singapore to low er its cost of production and allow the price of its final goods and services to be cheaper. This will increase the price competiveness of Singapore exports as they are relatively cheaper than foreign goods. Since the export revenue will be higher than the import expenditure net exports(X-M) will increased. Net export is a component of AD, thus AD will also increased. As seen from figure 4,when AD curve shift right from AD1 to AD2 the real GDP increases from Y1 to Y2.Thus,Singapore experience Economic growth as a result of macroeconomic stability due globalisation. and real GDP will increased hence economic growth is achieved. Thus globalisation is undeniable playing as key successfactors that leads to economic growth in many Asian countries.6.Political StabilityPolitical stability provides the outlook of the economy of the country. Many Asian countries like Singapore has very good governance with strict rules and regulations together with the sound infrastructure making it a conduc ive place for investment. When there is political stability there will be good business sentiments as investor are able to intention ahead their expected costs of operations of the business and the returns in the long term. Politically stable country means the likelihood of civil struggle or political war is low hence the operation of the firms will be stable and there will be low happen of facing the possibilities of shutting down.Hence foreign direct investors are attracted to politically stable country because of the stability of the business outlook. Since investment expenditure is a component of AD an increase in Investment expenditure will lead to an increase in real GDP and help Singapore to achieve economic growth. Thus Asian countries that are politically stable acts as a key success factors to support other factors to help Asian countries like Singapore to achieve economic growth.7.ConclusionI agree with the author that one of the key success factors has been macroecono mic stability that leads to economic growth in many Asian countries. However with macroeconomic stability alone, without globalisation and political stability in these Asian countries,it is unable to achieved tremendous economic growth.This the tremendous economic growth is achieved as these key success factors exist together and support each other.If not the tremendous economic growth if based on macroeconomic stability will only be in the short terms but globalisation and political stability allows the tremendous economic growth to last in the long run.