Tuesday, June 7, 2011

United States Economic Growth

The US is the worlds largest economy, and fluctuations in its success have a major impact worldwide. In recent years United States economic growth has been hit by the credit crunch and increased competition from other countries such as China, but there has been recent positive activity so there is hope that economic expansion can resume. The US economy is largely based on freedom of trade, low regulation and low taxation. This has encouraged new business growth and innovation in science and technology. The US is home to more millionaires and billionaires than anywhere else on earth, and is also home over a quarter of the largest companies in the world.

The US economy is further strengthened by its geography and natural features. It is rich in minerals and has vast areas of fertile land perfect for farming. There is extensive access to the sea, which has greatly assisted economic growth in the US history. Due to mass immigration through the 19th and 20th century, the US has been able to sustain a large workforce, particularly with relation to lower tier jobs. And because of the size of the US, there is more space to manage this influx of population than in some other countries.

Immigration also means that the growth of the retired population who will require social security payments while not providing any new tax revenues into the economy, can be sustained as there is a continual supply of new taxpayers. In Japan, where land is a limited resource, this has become a huge problem, where an aging population causes issue of an unstable economy. Unemployment since the global economic downturn remains relatively high, the official figure being 9%, but dependent upon which measure being used may be as high as 15%. As the downturn has forced wages down, it is increasingly the case that new jobs are going to the immigrant population who are happier being paid less. This means that unemployment among the native US population is higher than average and is set to stay this way for some time to come.

The withdrawal of easy credit as a result of the recession has also meant that there are a large number of people whose homes have been repossessed or who are in arrears with their mortgage payments. In turn this has meant a drop in consumer spending with a subsequent knock on impact to revenues of small and large businesses. These businesses account of over 90% of the economy of the US, so the impact is clear.

However, in areas of technology and science, the United States is seeing massive growth as companies supplying social networking, internet searches and computing or tablet technology have growing exponentially in the past decade. The way people interact particularly the generation born since 1990, 98% of whom have used, or regularly use a social networking site has altered radically in those years, and if world economies are changed in the same way, then there is a whole new phase of United States economic growth to come in the remainder of the twenty-first century.

Chinese Economy Growth

With the worlds largest population, it is no great surprise that Chinese economy growth has begun to increase rapidly in the last decade. In fact, the growth has been so fast that there is now concern that the economy may be overheating and there will be a period of contraction as it resettles.

Despite the large population and the many natural resources afforded to the country, China has until recently been a sleeping economic giant. Divided by warlords and foreign invasion and exploitation in the 19th and early 20th centuries, China turned to communism in 1949. Attempts to mobilize a still mainly agrarian population in the 1960s and 1970s were failures and led to much hardship. Laws restricting personal economic freedom also restricted any efforts for the economy to grow.

However since the 1980s (albeit at an initially gradual pace), restrictions on the freedom to own private property were lifted, and this has assisted with the Chinese economic boom. In turn this has lead to a surge in average per capita income and disposable income. Traditionally China has always been an inward looking society, but now is the second largest importer of goods in the world. Wherever possible the Chinese will purchase home grown products, which means that revenues stay within Chinese borders as much as possible, but at this stage of its economic story there are still a number of products that are produced elsewhere, such as the US that are not available in China.

The population that was once based almost entirely on the land is now increasingly working within an urban setting. Hours are long and pay is low compared to other parts of the world, but the vast Chinese population ensures that there is always someone available to fill any post. Huge numbers of factories produce goods and working parts for companies throughout the world. So as well as being a large importer of goods, China is now the worlds biggest exporter. However, the agricultural sector is still highly significant, and one third of a billion people work on land, producing an enormous amount of basic foodstuffs such as wheat, barley, potatoes, tea, and of course rice, of which it is inevitably the worlds biggest exporter. Livestock also constitutes an integral part of this element of the economy, particularly with relation to pigs and chickens.

As China is still run by the Communist party, most of its major assets are still state owned, and the banking sector is no exception, with 98% being managed by the central bank and finance ministry. This manages the whole internal banking system in addition to foreign trade and overseas transactions.

Also rich in natural resources, the economy growth in China has been driven by extensive mining of coal, which it has in abundance, as well as iron ore and almost every other key industrial element. Additionally there are vast supplies of oil and natural gas, most of which is used internally, a significant factor in ensuring economic freedom from other countries. The growth of the Chinese economy might suffer some minor downturns on the way, but the general trend for the coming century is certainly upwards.

Monday, June 6, 2011

Market Economy Definition

Free market economy definition can be put in very simple terms where it means a system where the buyers and the sellers are the ones that are responsible for all the trade choices that they make. This means that they are free to determine how goods and services are distributed. The forces of demand and supply have a lot to do with this and it is characterized by trading without tariffs or subsidies that have been imposed by the government.

One of the things that the government of any country is involved in is controlling and insuring that there is law and order. They ensure that the sellers set a fair price for the commodities that they are selling but it does not have a role in administering the price that is set for the commodity. The prices that the sellers set are those that are determined by demand and supply forces. The basis of allowing this type of market is so that the people will have the control that they need for the resources. The free market has so many other factors that determine how the trade is conducted and the living standards of the people there are really considered. There are many countries in the world today that have a distribution system.

This system is considered to be most efficient where the government wants an optimum way of how they can distribute the county's resources. It is associated with a society that uses capitalism where many of the means of productions are owned by individuals or they are privately owned. On the other hand, there is the socialist market where the government is the one that is responsible on regulating the system. This is to say that many of the prices of the goods and services that are in that particular country are administered by the government. The prices are fixed and in case there are any raw materials that are needed, they come from the market there in the country even before they can get them from another country.

These countries have been using the socialist system are gradually moving for capitalistic economy where they use the free markets. The biggest advantage about this is that a person gets what they deserve and what they have worked hard for. This is very different from the other system where the people are put in the same plane.

The success of this has been evident in so many countries where it has been used been used in the long term. There is a lot of liberalization where people are allowed to trade while exercising these principles. The success is determined by the growth and the increased level of trade. The free market economy definition is within the doctrines of so many different things and it is still for the growth. Both of these forms of trade are done for the good of that particular place and it is seen to enhance and help the citizens to attain prosperity and growth.

European Union Economy

The European union economy refers to the economy of 27 different states, or countries, primarily located in Europe. The EU can trace its history back to the European Coal & Steel coalition, of which six countries were members in 1958. The current members of the EU include Spain, Italy, United Kingdom, France, Germany, Poland, the Netherlands, Sweden, Belgium, Greece, Austria, Denmark, Ireland, Finland, Czech Republic, Portugal, Hungary, Romania, Luxembourg, Slovakia, Bulgaria, Slovenia, Lithuania, Bulgaria, Malta, Estonia, Cyprus, and Latvia.

The main unit of currency within these states is the euro. The change to using the euro for economic convergence within the countries and to maintain economic stability. This is the most common currency form used in Europe, as 17 of the current members use the euro with the remaining members pledged to change once they have met the specific requirements needed to change currencies. This economy is the largest in the world with more a gross domestic product, GDP, estimated at more than 16 billion dollars in 2011. This makes it the largest single market in the world. However there are differences between the EU countries. It will be interesting to see if the EU can maintain its position as the largest market as the growth of the economy in Brazil, India and China has caused the rate of GDP increase to slow.

The success of the EU is primarily due to the many energy resources available in EU countries. There are six oil producing countries in the Union, mainly drilling oil form the North Sea. The Union is the seventh largest producer of oil in the world. Countries within the Union also have large natural gas reserves and large coal reserves. The the amount of coal being mined has decreased. Services, mainly tourism and agriculture, make up the rest of the profit in the GDP. The EU is a major tourist destination and the ability for EU citizens to easily travel to other EU countries has only promoted further tourism. Of all the countries France is the top tourist destination in the world.

Agriculture is also important to the EU's economy as EU farmers to have protection. The EU frowns upon the trade agriculture from developing countries while promoting agriculture from EU countries. The agricultural sector also receives many subsidies through the Common Agricultural Policy. The other cause of the large GDP is the fact that the EU is the largest exporter found on the globe. The internal trade between members is also an advantage as border control and tariffs are reduced. Many of these trade benefits are due to a common currency and the European Union Association Agreement also has trade agreements with many other countries.

Some of the largest companies in the world are found in EU member states and these states are home to the local headquarters. Some of the largest companies include Airbus, Allianz, Air france-KLM, Amorim, Inditex, ArcelorMittal, Anhaeuser-Busch InBev, L'Oreal Group, Royal Dutch Shell, LVMH, Nokia Corporation, HSBC, and Grupo Santander. The automobile industry is also an important sector for the European Union Economy.

Sunday, June 5, 2011

Mixed Economy Definition

Mixed economy definition does not have one concrete or definite answer that can be given. Mainly, there are advantages that have been used together with other factors stating that this is a mixture of different ideologies. There are several answers that come up when one asks about this. There are some answers that can help to shed some light on the whole subject.

There are scholars that say that it is a centralized economic planning and legislature, others say that it is decentralized where there is execution of policies and legislation. When other people look at it, they say that it is where people participate at the grassroots level to help in policy formulation. The government is the one that is involved in the decentralization and the distribution of wealth. With these different explanations, a person can see that there are several distinct features that are there that can be seen within different economies. Note that the main feature or the basic feature is that the liberty that is there in business co-exists with the regulations that have been set up by the government. Some of the countries that have this are India, Canada, and Australia among others.

The economies are based on principles and ideologies that are a little bit different, but some of the doctrines have been set up for several functions. They are very effective in defining the manner and the direction in which the market of that particular country is preceding. The ideologies are changed into practical applications that form the general system of the nation. In today's world, there are many different types of economies and they are all characterized by different things. The capitalism system is where there are many private owners that have so many undertakings. On the other hand, there are socialist system has so many different undertakings that are controlled or owned fully by the government. The ones that have this are those that have a mixture of several different systems.

The advantage to this is that where there are different systems there are so many things that take place at the same time. This means that more people have the chance to try out different things. The traders also have different systems that they want to use. Even those that there are in places where both of them are in operation, they know that they have been able to benefit people fully. In these types of economies, they have been very successful in providing their citizens with all their basic needs. Other necessities that they get are things like good infrastructure, protection and the freedom to exercise and set up their own private enterprises which will help them to gain in their private lives.

Mixed economy definition also means that the domestic market is allowed to thrive and it is very competent in order to meet the international standards. There are many other things that are able to be met from other things that have not been mentioned here but are equally beneficial.

Market Economy Countries

Free market economy countries are the ones where the prices of goods and services are determined by a free price system. This can be differentiated with other forms of where there are different forms of things that determine how things work. There are others that are mixed while there are others that operate on a laissez fair manner.

In today's world, the economies do not exist in a pure form because there maybe so many different things that regulates it. This to different degrees instead of waiting for the forces to self regulate themselves, there has to be other factors. This is a term that has synonymously been used with other terms and it does not exclude other economies that have other systems. To those that do not understand the term well, it can be a little bit misleading but with more examples, they are able to see some of the most conspicuous differences that are there. There are different perspectives that are there that are used that enable people to point out the differences from the other types of economies that are there.

It is very possible to visualize a system where there are independent producers and the allocation of goods and services is through a system that is self managed. This is one of the systems that have been proposed in so many places and it depends mainly on the division of labor even before a person can think about demand and supply. Although the term is not used to refer to a situation where everything is absolutely free, it is simply used to denote a place where there is a lot of freedom in trade. There ate many populations that prefer this because it is well planned and executed, it has some very positive traits. The places where they have been able to adopt this system their economies have really grown.

Production in such a system is privately owned and many of the investments that are operated they are for making profits. The distribution and the pricing of the goods and services are done through an operation in the economies. It is seen to involve the rights of people that act as the legal persons and they trade for the sake of making money. It has been dominant in the western world ever since the system of feudalism was eliminated. The characteristic here is that there is a lot of planning that takes place. The places where they use this type of system have been able to do so well and even when they are compared to others they seem to work better. The demand and the supply scale are the things that determine the planning that takes place here.

The free market economy countries are generally understood in terms of all the components that are there and the ideal things that they have been able to achieve. There are mechanisms that are available that give the persons or the traders several economic freedoms and the government also plays a part.