International Economics and Policy
Country with the Highest Economic Growth in the Region of Middle East / West Asia: Qatar
Lecturer: SHAHZADEH QAMAR JEHAN
Economic growth is a term used to indicate the increase of per capita gross domestic product (GDP) or other measure of aggregate income. It is often measured as the rate of change in GDP. Economic growth refers only to the quantity of goods and services produced. Economic growth can be either positive or negative. Negative growth can be referred to by saying that the economy is shrinking. Negative growth is associated with economic recession and economic depression. In order to compare per capita income across multiple countries, the statistics may be quoted in a single currency, based on either prevailing exchange rates or purchasing power parity. To compensate for changes in the value of money (inflation or deflation) the GDP or GNP is usually given in "real" or inflation adjusted, terms rather than the actual money figure compiled in a given year, which is called the nominal or current figure.
The 4 Key Factors That Determine a Country's Rate of Economic Grow
The economic growth of a nation determines how its production and export of goods and services affect national income and the standard of living. Strong economic growth requires strong domestic infrastructure and foreign relations. As shown by nations throughout human history, availability of natural resources, technological innovations, and a productive workforce all contribute to economic growth. In the 18th century, Great Britain's Industrial Revolution provided a historical example of unprecedented economic growth, and similar factors can be seen globally today. Natural Resources
1. The availability of natural resources allows a nation to produce material goods for its own use or foreign trade. Food crops qualify as a natural resource. A surplus of food allows citizens to take time away from food production and produce consumer goods--or act as consumers themselves. Non-food natural resources, such as mineral deposits, can contribute to economic growth by providing the material for technological innovation, the next factor in economic growth. During the Industrial Revolution, according to Steven Kreis, Ph.D., history professor for the American Public University System, England had a large supply of coal to use for energy to power machinery. Coal required no access to a water source. New crop rotation techniques provided greater soil efficiency. Today, an abundance of one of the most important natural resources, oil, is found in the Middle East. The Middle Eastern country of Qatar, for example, had the second-highest per capita income in 2010, according to the CIA World Factbook. Technological Innovations
2. A critical aspect of economic growth, technological innovation allows inventors and producers to use existing technology to produce more food or goods in less time with less effort, thus enabling a higher rate of production. This, in turn, creates a surplus of goods. Technological innovation can refer to new methods of producing or preserving food, new types of machinery or more efficient energy sources to power machinery. According to the Charles Davidson College of Engineering, the invention of James Watt's steam engine converted the burning of fuel to mechanical work.
3. If a nation has abundant natural resources and the technology to use them, it can support a larger population. Population growth means more people will put money into an economy by buying necessities or commodities. According to the Economic History Site, England's population grew from 7.7 million people to 13.2 million from 1791 to 1831, the height of the Industrial Revolution. However, unchecked population growth can have a negative effect on a nation's economy when the number of people causes the demand for natural resources and goods to exceed...