Thursday, April 4, 2019

Analysis of Economies Based on Data Into Stage 1, 2 and 3

Analysis of Economies base on Data Into coif 1, 2 and 3Indranil DharAnalysis of economies based on data into Stage 1, Stage 2 and Stage 3establish on World Economic Forums Global Competitiveness Report 2014/20151. And the data provided in the spread sheet, the countries end be divided intoFactor de terminalined Economies (Stage 1)2Efficiency impelled Economies (Stage 2)3Innovation determined Economies (Stage 3)4This distinction is primarily based upon GDP per Capita as well as share of exports of mineral goods in total exports.5Stage 1 Factor Driven EconomiesVietnamMyanmarNicaraguaTransition from Stage 1 to Stage 2BotswanaStage 2 Efficiency Driven EconomiesThailandTunisiaTransition from Stage 2 to Stage 3CroatiaMauritiusStage 3 Innovation Driven EconomiesGreece hence Competitive baron of a arrange 1 sparing trick be reason as follows= 0.6(Factory Driven Economies) + 0.35(Efficiency Driven Economies) +0.05 K- which is a constant for Innovation Driven Economies)Hence Competi tive index of a peg 2 economy can be calculated as follows= 0.5(Factory Driven Economies) + 0.45(Efficiency Driven Economies) +0.05 K- which is a constant for Innovation Driven Economies)Hence Competitive index of a stage 3 economy can be calculated as follows= 0.2(Factory Driven Economies) + 0.5(Efficiency Driven Economies) +0.3 K- which is a constant for Innovation Driven Economies) present 1st Pillar Institutions (25%)Intellectual property shelterBurden of Government regulationHere 2nd Pillar theme (25%)Quality of Overall InfrastructureHere 3rd pillar Macroeconomic environment (25%) utter(a) National Savings as a % of GDP( Here since all the parameters are in range of 1-7 with 1 world worst and 7 beingness best, I have modified the data within excel to event this( please refer extension A)Here 4th pillar Health and primary feather education (25%)Quality of primary educationHence Factor Driven Economies = (Intellectual property protection+ Burden of Government regulation)/ 2(25%) + Quality of Overall Infrastructure (25%) + Gross National Savings as a % of GDP (25%) + Quality of primary education (25%)Here fifth pillar Higher education and training (17%)Quality of maths and science educationHere sixth pillar Goods Market efficiency (17%)Trade Tariffs(Here since all the parameters are in range of 1-7 with 1 being worst and 7 being best, I have modified the data within excel to showcase this( please refer Appendix A)Here 9th pillar Technological Readiness (17%)FDI and technology transfer (17%)Here Efficiency Driven Economies = (Quality of maths and science education (17%) + Goods Market efficiency (17%) + Technological Readiness (17%)) (Since info about other pillars are non present)We depart analyse the countries at each stage with regards to its perfectly term fruit (up to 10-15 years) and great term growth (15-20yrs +) on the basis of the competitive index at their respective stages and the competitive index of their beside high stage. If the competitive index of a country at its own stage is high it means that the country is away from its steady submit and hence it leave behind have short term growth prospects. Similarly if the competitive index of a country is high at its side by side(p) stage it means it is ready for the next aim and hence it has long term growth prospects. This is off course subject to the condition that the current growth parameters at its current stage are at a satisfactory level.Analysis of Stage 1 economiesSince these are stage 1 economy the assumption here is more or little they have a similar intersection function though convergence law may not apply as these countries are having dispa judge economic, cultural, geographical, historical backgrounds. As Stage 1 economies, the growth rate is heavily dependent upon capital accrual which in turn is dependent on high investment (savings rate). It will also depend upon primary education, quality of al-Qaida, labour, and health and primary ins titutions more than secondary education or trade barriers or technical innovation. It will also depend if the country has reached its steady state at that production function level and at what level of capital aggregation. Only if it shows sustained growth i.e. it is far away from its steady state and its primary factors( competitive index at stage 1) is high, it can be evaluated to check if can attach its production function to the next higher level for which more importance will then be given onto secondary education, trade barriers and technological advances( Competitive index 2). Also GDP growth of prior years gives a trend.Considering the above factors we can conclude that Vietnam will grow the fastest within the next 10-15 years (short term). As it shows favourable stats it can progress to the next higher stage in the next 20 years.Myanmar on the other wad seems to have achieved steady state at a real less capital. Since the rate of investment is less and its primary fac tors such as education and infrastructure is less, its growth prospects are less. With a high trade barrier and less secondary education and lesser technological advances it cannot graduate itself to a stage 2 economy in the next 20 years.Nicaragua has similar statistics to that of Myanmar. as yet its primary education, quality of infrastructure is higher which suggests a higher growth prospect. Since its trade barriers are less and technological parameters are high, it has more chances of long term growth than Myanmar.Overall, the ranking on the basis of long term growth is as followsVietnamNicaraguaMyanmarAnalysis of Stage 2 economiesSince these are stage 2 economies, these will be more dependent on the next higher production function curve which is higher education, trade barriers, and technological advances. Off course investment in infrastructure, institutions, primary education and capital accumulation will still remain important though not as high as they were for stage 1 ec onomies.Botswana seems to be leading the pack but because it is highly dependent upon minerals mainly diamond archeological site which have finite years and are subject to market speculations10, it will be ranked refuse to that of Thailand due to the fact that it is lesser in secondary education and technology transfer. Thailand in fact can graduate to the next higher level in the next 20 years.Tunisia on the other hand due to its high trade barrier will have consistent slow growth rate at its current productivity levels and will not progress to the next higher level.Overall, the ranking on the basis of long term growth is as followsThailandBotswanaTunisiaAnalysis of Stage 3 economiesSince these are already stage 3 economies, the determinant factor will be their distance from steady state. And this will be dependant on high total factor productivity factors such as technological innovation, efficiency, adult male capital, trade barriers more than capital accumulation or primary e ducation or quality of infrastructure unless there is a big issue with those parameters. The competitive index of stage 3 sums up the full of life factors and based on that we can say Mauritius is having this highest growth prospect followed by Croatia and Greece.Greece is having a recession which can suggest in a way that it has reached its steady state. Since its technological and efficiency factors are not very high, it will struggle to grow in both short as well as long term.Overall, the ranking on the basis of long term growth is as followsMauritiusCroatiaGreeceConclusionBased on the above analysis, we can conclude that Vietnam is the most growing country whereas Greece is the least.The rankings are as followsVietnamThailandBotswanaNicaraguaMauritiusTunisiaMyanmarCroatiaGreece smoothing iron Law of convergenceConvergence can only happen when the countries are similar in footing of geography, culture, history and other related parameters.Countries that can be clubbed togetherV ietnam, Thailand and MyanmarCroatia and GreeceMauritius and BotswanaIn the case of Vietnam, Thailand and Myanmar, Vietnam can commence up with Thailand in the next 20-30 years.Similarly, Croatia will catch up with Greece within the next 10 years.And at last Botswana will catch up with Mauritius within next 10 years.1 http// http// http// http// http// http// http// http// http// http// 5.pdf11 http// http//

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