In this sense, authoritarianism has its own advantage as it can draw and execute policy beneficial to economic development without facing the objection from citizens. State can then make policy which are less favourable to citizens but beneficial to economic development, for example, country may adopt an economic contractionary policy in order to save enough money for future investment. Although the policy cause decrease in demand and have negative
i) Trade liberalization promotes free trade between countries by removing tariffs and non-tariff barrier on the exchange of goods. The reduction of tariff and non-tariff barriers includes tax charged on imported goods, licensing rules, quotas and other requirements (1). Trade liberalization benefits a nation by lowering price for the scarce resources which enables domestic firms to create more products and foster economic growth. The other advantage is that countries involved in free trade can specialize in production based on comparative advantage for goods. From academic research of rapid development in Asia around the 1990s; the reduction of trade barrier and growth showed positive relationship.
Competition has an importance role to play in this. It has always been evident that industries which have greater competition experience higher productivity growth. It can be seen that competition leads to an increase in the allocative efficiency of the firms by make the entry of new efficient firms in the market easy, on the expense of the less efficient firms (exiting the market). Competition in the market will also lead to innovation. The firms which are rivals to each other will try to improve their market share by introducing different types of products, which will be a work of
There is also increased political support for globalization and political pressure for higher wages as the minimum wage requirements are raised (Yüksel, 2012). Economical Factors There is a reduction in the rate of unemployment in the United States and stability in the national economy. A reduction in the rates of unemployment has also contributed to the growth of disposables incomes that is held by households. Developing countries are also having continued growth providing an opportunity for retail companies that have an objective of expanding its business internationally (Yüksel,
In the 1960s, economic theory shifted to a belief that monetary policy (instead of fiscal government policy) was the main ingredient to a stable and fully expanded and producing economy. What is Monetary Policy? According to EconmicsHelp.org, the difference between these 2 different strategies is that monetary policy involves changing the money lending interest rate in a society, and thus the amount of money available to the public. According to the monetary policy intervention model, higher interest rates, decreases money available and consumer spending. This lowers aggregate demand in the economy.
IPO underpricing: Determinants of first-day IPO returns for Emerging growth firms in US Introduction It has been widely recognized that the presence of emerging growth firms is crucial to an economy. These firms not only kindle competition, innovation and knowledge spillover in the economy but also create jobs and are more likely to offer better salary and benefits. They also tend to generate more value and profits but are less prone to failure compared with small businesses. In addition, they are more likely to export products and services while producing higher productivity due to investment in research and development. (Coopers and Lybrand, 1988) In the case of the United States, the rise of these companies claimed America’s economic
This part is just an expansion and emphasis from the preceding part of the paper to illustrate the importance of flat tax. Under the flat tax system, the foreseeable future indicates that there would be less barriers and constrains of the liquidation of funds. Moreover, under the background of global economic and political environment, it is the time for the nation to stimulate the gloomy economy. Stimulating the gloomy economy is to increase value of the total society instead of simply move the cash from one class to another. As a result, flat tax is more favorable compared to progressive tax under this global economic
Enforcing specific labour standards can help this economic stability through protecting workers, avoiding strikes, and paying the people more money. In turn, workers will not only better their quality of life, but will also boost their country’s economy through spending. As suggested by the International Labour Organization, “…international labour standards are an essential component in the international framework for ensuring that the growth of the global economy provides benefits to all” (“Introduction to International Labour Standards.”). International labour standards will provide a more equal distribution of wealth as well as indirectly boost the global economy through stabilizing individual economies. In conclusion, regulatory labour laws will not inhibit the growth and development of the global economy, despite the claims made by companies presented in Kernaghan’s video.
In this way relatively poor people in society are helped to increase their welfare and to limit inequality. On the other hand, there is the possibility to decrease inequality by limiting some of the welfare of the relatively rich people in society. This can be done by raising taxes on luxury goods while keeping the tax on other goods the same. However, a sales tax on
Explain why some financial institutions prefer to provide credit in financial markets outside their own country. Many financial institutions want to explore the financial markets outside their country to increase their presence on a much broader market. Also, doing so provides the institutions with better financial security. For example, if their country is experiencing an economic meltdown then the institution would not be greatly affected by such turbulence. Moreover, the financial institutions could earn higher return if dealing with markets that have high interest rates and a steady economy.