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The Economic Growth and Development Of The UK Assignment Sample
Introduction of The Economic Growth and Development Of The UK Assignment
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Explain Both The Meaning Of Economic Growth And Why It Is Considered To Be An Important Objective For Government. Apply Relevant Economic Analysis To Evaluate Why It Is Argued That Relying On Economic Growth Itself Is Not A Useful Way Of Measuring Real Progress In Advancing The Well-Being Of Society.
Economic growth indicates a measurement of a country's real income. Measuring this growth is important to analyse countrymen’s capacity to purchase goods and services. The study is going to focus on the economic growth of the UK and the real means to determine economic development. Different aspects of a country are going to be observed such as land, capital, entrepreneurship and capital for interpreting the economic growth easily. In a broader aspect growth of an economy is being determined by viewing enhancement within employment rate and productivity. Every country tries to increase supply of public goods along with state production capacity for improving the condition of economic growth.
Economic Growth
Most people in a country look for good health, social connections, job opportunities, developed environment and proper human rights. All these elements are being achieved by a country which is constantly developing and growth is competitive than any other neighbour countries. As opined by Destek and Sinha (2020), people’s income is one of the prime elements to measure a country’s growth and higher growth is observed with enhanced prosperity along with decreased poverty. Country’s GDP per capita helps to secure adequate information regarding monetary aspects and that leads to understanding countrymen’s capacity in earning rate. As commented by Dinh et al. (2019), from the economic concept new growth theory indicates real GDP per person is going to perpetually increase due to countrymen working to earn profit. This profit is being channelised towards the country’s economic growth and supports ongoing productivity.
Economic Growth Cycle
(Source: Dinh et al. 2019)
The central concept of this theory indicates competition within the country for development squeezes profit and paves a path for people to constantly seek new ways to live better. Moreover, a country tries to use the secured profit to invent new ways to produce products or services for maximising profitability. In 2021, the British economy expanded by 1.1% within three months and the largest contribution towards the economy came from the entertainment, healthcare and arts sector (ourworldindata, 2021). In the third quarter of 2021, UK’s household consumption has increased which has made a largest contribution towards country’s expenditure. However, the country’s inventory position has fallen down due to rising challenges in the supply chain and adverse contribution towards net trade.
Importance for government
Constant growth of economy indicates a rise in real GDP as a result the government of any country makes it an objective to include effective procedures to improve an economic condition. As stated by Latif et al. (2018), every country either in a developing or developed state makes economic growth as a micro-economic objective to achieve an enhanced living standard, more job opportunities and improved tax revenues. Economy of a country constantly growing signifies that the government of that country is able to secure more tax from the increased level of expenditure. The tax revenue is being used by a government to provide public services and goods such as education, healthcare and social protection.
The importance of economic growth for a government moves in a circular movement. Such as enhanced growth leads to higher tax revenue; public as well as private sector investment increases and all lastly productivity expands. This expansion in productivity helps in reducing government’s budget deficit as the tax revenue earning has increased. The cyclic movement goes in a loop and provides positive feedback as firms from both private and public sectors invest with a hope to collect higher returns. As commented by Gozgor et al. (2018), a country has to bear a certain amount of cost to sustain the economic growth for a longer tenure. Certain rise of inflation rate, ineffective decisions leads to unbalanced growth and environmental costs are some of the costs for economic growth. Unsustainable economic growth leads to high inflationary growth and this leads to higher costs for improving economic conditions.
Relevant economic analysis
Policy -makers of a country have multiple objectives that include an overarching criterion for achieving the importance of the developed objectives. Among all the objectives, the primary criteria by policy-makers of a country are the wellbeing of the entire population. As opined by Sobiech (2019), a government tries to develop economy by diverting the existing country’s funds towards policies that support the greatest well-being of the country. However, government has a fixed budget constraint as a result it is important to keep focus on per paid expenditure which leads to improved well being. New policies of a country while being prepared keep a focus on mental and physical development of countrymen; improved relationships in a workplace and the overall society. The policy-makers while approving a particular policy secure adequate evidence to ensure that effective outcome is being achieved easily. Effectiveness of a policy counts for the wellbeing of country for a longer tenure.
Benefits of economic Growth
(Source: Nyasha and Odhiambo, 2019)
EU Councils of Ministers in 2020 argued that the policy-makers of EU countries need to put the wellbeing of the people in the centre for designing the policies. Government of a country aims at looking over wellbeing of the ruling society while preparing policies for being re-elected several times by the countrymen. In this way the existing government gets a chance more than once to rule over a geographical boundary and countrymen get a chance to enjoy a developed environment. As per viewpoint of Nyasha and Odhiambo (2019), a government while preparing policies for wellbeing looks at the ratio of cost per benefit. The policy-makers who are able to achieve a higher rate of that ratio are able to maintain a balanced government budget. Redistribution of income and decreased income inequality are the supporting factors for the success of the ratio. Social welfare enhancement of countrymen is being measured not by just total happiness achieved but additional happiness includes while conducting daily duties within a country.
Economic growth itself does not help in understanding the enhancement in well-being of countrymen. Professional economists look over certain supportive indicators that lie within an economy to understand the growth. GDP, stock market, unemployment rate, consumer price index, producer price index, balance of trade and interest rates are common indicators to measure economic growth. In UK, the stock market condition has improved to 7491 from 7381; GDP growth from 0.9 to 1.3; and unemployment rate has decreased from 3.9 to 3.8 (ons.gov, 2021). Observing all data related to UK’s economic growth indicators it is easy to interpret that the government is preparing policies for entire country’s well-being.
Relevant ways to measure real progress
Gross Domestic Product measures the factors that make the life of a country worthwhile. Among all the indicative factors GDP is the most effective one to understand the growth of an economy and its contribution towards the country’s well-being. Therefore, all policy-makers put enough effort to improve GDP rate as the rate considers market value of all produced goods and services. This value guides in understanding consumption and expenditure level by countrymen along with enhancement of investment rate. Trends towards well-being while correlates with the GDP per capita then well-being concept becomes an empirical question for the policy-makers. In this world, among all the developed countries New Zealand holds the first position which has incorporated measures of well-being within government ledgers (forbes, 2018). Therefore, this initiative has become possible by constant observation at environmental, health and educational indicators. UK government prepares objective measures for understanding the well-being of the country. The measures count life expectancy rate and levels of unemployment whereas the government also prepares certain subjective measures that look over overall satisfaction from while conducting daily chores.
Most of the developed countries use health as a key indicator for measuring the well-being of a country. As opined by Dinh et al. (2019), wealthier nations have the highest capacity to remain healthier for a longer time frame. Moreover, macro-level health statistics correlates with GDP to determine the condition of health of a country. In the UK, personal well-being levels have improved by 4.6% with the time frame of 2011 and 2018 which is comparatively closer to the improvement in EU (ons.gov, 2019). Conventional measurements of growth have been enhanced within the country as policy-makers are trying to prepare alternative means for improving standards of living. In this alternative means the policy-makers try to develop sustainable actions that support in reducing the levels of pollution and less usage of non-renewable resources. As opined by Latif et al. (2018), it has become urgent to address the changes that have taken place in climate and provide an improved place to live for countrymen. Hence, well-being looks over the social and political aspect of a country as a result the policy-makers design policies that cover every aspect of a country.
Conclusion
Summing up the entire information included within this study indicates that certain political factors help in measuring the economic growth of a country. Most of the information collected looks over the economic development taking place in UK. It has been understood that economic growth is understood by observing different aspects within a country such as GDP growth, inflation and employment rate. Among all the aspects GDP is the only effective factor that helps in understanding the well-being of a country. Policy-makers design policies after observing the effectiveness of well-being.
References
Destek, M.A. and Sinha, A., (2020). Renewable, non-renewable energy consumption, economic growth, trade openness and ecological footprint: Evidence from organisation for economic Co-operation and development countries. Journal of Cleaner Production, 242, p.118537.
Dinh, T.T.H., Vo, D.H., The Vo, A. and Nguyen, T.C., (2019). Foreign direct investment and economic growth in the short run and long run: Empirical evidence from developing countries. Journal of Risk and Financial Management, 12(4), p.176.
Latif, Z., Latif, S., Ximei, L., Pathan, Z.H., Salam, S. and Jianqiu, Z., (2018). The dynamics of ICT, foreign direct investment, globalization and economic growth: Panel estimation robust to heterogeneity and cross-sectional dependence. Telematics and Informatics, 35(2), pp.318-328.
Gozgor, G., Lau, C.K.M. and Lu, Z., (2018). Energy consumption and economic growth: New evidence from the OECD countries. Energy, 153, pp.27-34.
Sobiech, I., (2019). Remittances, finance and growth: Does financial development foster the impact of remittances on economic growth?. World Development, 113, pp.44-59.
Nyasha, S. and Odhiambo, N.M., (2019). Government size and economic growth: A review of international literature. SAGE Open, 9(3), p.2158244019877200.
Websites
forbes (2018) Measuring Well-Being: It's More Than GDP Available at: https://www.forbes.com/sites/joshuacohen/2018/10/15/measuring-well-being-its-more-than-gdp/?sh=61261d484eaa[accessed on 26th April 2022]
ons.gov (2019) Measuring national well-being in the UK: international comparisons, 2019 Available at: https://www.ons.gov.uk/peoplepopulationandcommunity/wellbeing/articles/measuringnationalwellbeing/internationalcomparisons2019 [accessed on 26th April 2022]
ons.gov (2020) UK economy latestAvailable at:https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/ukeconomylatest/2021-01-25 [accessed on 26th April 2022]
ourworldindata.org (2021) What is economic growth? And why is it so important? Available at: https://ourworldindata.org/what-is-economic-growth [accessed on 26th April 2022]
