The second time period is from the year 1920 until 1950, and is marked by the fluctuations of extreme unemployment, and uncertainty of the economic system. The “pessimism”of the period from 1880 until 1920 can still be seen in this period, but has risen from a national state to a global state. Economists in this period are mainly concerned with the effects of the war and high unemployment. Economists with interest in history tried to trace back the cycles of inflation to the industrial revolution. Historians with an interest in economics were most likely to apply the cycles of inflation to the industrial revolution in order to see what answers come out of it.
After the Second World War, economic factors became more and more important in the world. Both developed and developing countries want to improve their economic development rapidly. After, the developed countries increase economy successfully by free trade; the developing countries started to follow their steps. From that time, global economy began to burgeon. Economic globalization provides many chance
Economic analysis is important in order to understand condition of an economy. The level of economic activity has an impact on investment in many ways. If the economy grows rapidly, the industry can also be expected to show rapid growth and vice versa. The degree of economic growth is directly proportional to the stock price i.e. when the economic activity is high, the stock prices are also high indicating the prosperous outlook for sales and profit of the firm.
The innovation of technology is expanding from changing and positively affect the economy. In eras of technological improving, it causes industries to increase their productivity, so the country's economy is growing and improving its financial health (as cited in Moritz,
Both demand and supply factors are important in sustaining the growth of the economy. Mohr et al. ( 2015:414) state that supply factor caused an expansion in the production capacity of the economy. Therefore, it requires an increase in both the quality and quantity of labor, capital, natural resources, and entrepreneurship. These four factors of production play an important role in the economy of each country but natural resources and capital explain the growth of the economy in many countries.
In addition, a large body of literature in macroeconomics has underscored that productivity spillovers are important determinants of economic growth and that an increase in collective human capital will have an effect on collective productivity which is as a results of an increase in an individual’s education on productivity as a result of the investment in education. (Moretti, 2005). Robert (1991) developed a human capital model which shows that education and the creation of human capital is responsible for both the differences in labour productivity and the differences in overall levels of technology that we observe in the world today. This, according to him, explains the spectacular growth in East Asia that has given education and human capital their current popularity in the field of economic growth and development. Countries such as Hong Kong, Korea, Singapore, and Taiwan have achieved unprecedented rates of economic growth while making large investments in education.
The Relationship between Economic Factors and Economic Growth: An Empirical Investigation. Introduction: Economic growth is defined as the increase in the capacity of an economy to produce goods and services compared from one period of time to another. Economic growth is the continuous improvement in the capacity to satisfy the demand for goods and services, resulting for increased production scale and improved productivity. (Sources of Economic Growth, 2011). The economic growth of a country is associated in rising incomes, related increase in saving, consumption and investment.
Capital as a factor of production plays a leading role in economic development and the function of the financial market in making funds available to the deficit units from the surplus unit, can be seen as a tool to enhancing capital formation . According to Bakare (2011), Capital formation refers to the proportion of present income saved and invested in order to augment future output and income. Economic theories have shown that capital formation plays a crucial role in the models of economic growth. Growth models like the ones developed by Romer (1986) and Lucas (1988) predict that increased capital accumulation can result in a permanent increase in growth rates. The neoclassical economists suggest that economic growth is entirely
INTRODUCTION One country, increasing the amount of scarce resources or to have their limit the expansion of production facilities by improving their quality or production technology go to higher production levels and changing the institutional framework "Economic growth" is expressed. Economic growth, but also to raise real GDP per capita can also be defined as the continuous increase of production factors. Resources have greatly improved and highly industrialized the first and most important issue is to ensure the full operation of those resources for the country. Undeveloped industrialized countries achieving economic growth comes first of all problems and their positive whether you can connect to the solution is greatly affected. However,