Competition and Economic Development: Local Clusters in a Global Economy - Coursework Example

Blackwell’s article “Competition and Economic Development: Local Clusters in a Global Economy” effect of competition against economic development. Economic development is an economic transition, which is effected through successful incorporation of economic processes and policies. This framework culminates in the improvement of the economic status of a nation. Economic development is determined by measuring the variability of gross national product and the gross domestic product. Additionally, this element can be ascertained from the comparison of the economic performance of other nations with the performance of a nation.

There is constant economic, political, and financial competition among many nations. This aspect improves the lifestyles of the people of a given nation. Economic development encompasses the manufacturing processes and logistics of production (Blackwell, 2010). Economic development can also be determined by the life expectancy and literacy rates of the citizens of a country. According to Blackwell, the process of economic development leads to a generation of like quality healthcare and infrastructure.

However, this development can be done at the expense of environmental preservation efforts. Franko (2007) asserts that economic development results in depletion of environmental resources. This is given that industrial operations are associated with discharge of toxic gases to the air and discharge of industrial waste to clean water streams. In this regard, Blackwell’s assertions that there is a correlation between output and environmental pollution is congenial. The technology used in the industrial operations ought to be environment-friendly to foster economic development.

I concur with Blackwell’s argument that this correlation helps in gauging the negative impact of industrial activities on the environment. Economic development is enhanced by economic growth. Population growth leads to a reduction in economic development, given that high populace automatically reduces disposable income (Nafziger, 2006). Disposable income is a derivative of gross national income. The reduction of income indicates a decline of economic development. Evidently, extra funds are usually spent on an increasing population.

This compels the government to reduce expenditure on economic stimulation process. This provides savings for building of sufficient social amenities to accommodate the large population. The element of economic development is determined by the political climate and prices prevailing in the money, goods, security, and stock markets (Todaro, 2009). When the political temperatures are high, economic development is bound to slow down. In contrast, favorable political state guarantees economic development.

Polls reduce economic development because of uncontrolled expenditure in an economy. This leads to high inflation rates accompanied by high prices. It is agreeable that an increase of relative prices in the markets destabilizes the economy. This leads to a low rate of economic development. Blackwell is right in his assertion that an increase in uncontrolled expenditure is a bad signal for economic development because of inevitable inflationary and deflationary pressures.Economic development triggers an increase in national income, leading to improvement in the living standards of people.

This is subject to controlled expenditure, provided that expenditure in the economic stimulus process boosts infrastructural projects. Inflation hampers economic development because of its negative impact on the economic inducement process. This owes to the fact that raw materials become scarce, subject to escalation of costs in the goods market. Evidently, national expenditure ought to be controlled to have an equilibrium state in the goods, money, and stock markets. This enhances fair distribution of economic resources, which results in economic development.

ReferencesBlackwell, W. (2010). Competition and Economic Development: Local Clusters in a Global Economy. Review of Development Economics, February 14: 15-34.Franko, P. M. (2007). The puzzle of Latin American economic development. Lanham: Rowman & Littlefield. Nafziger, E. W. (2006). Economic development. New York. Cambridge Univ. Press.Todaro, M. P., & Smith, S. C. (2009). Economic development. Harlow: Addison-Wesley.