The convergence process is dependent on a large number of factors such as the population growth, speed of capital formation and the presence of efficient economic policies as well as appropriate financial institutions. Along with this the accumulation of human and physical capital are important as it significantly influences the savings and rate of investment (Halmai & Vasary, 2009, p.3). Technological spread, change in growth rate and total productivity of the factors are the major players in enhancing the rate of convergence (Halmai & Vasary, 2009, p.3). As per professor Jeffrey Sachs, countries following closed economic polies have not been successful in converging. The countries following closed economic policies had a growth rate of 2% whereas the countries following open economic policies have a growth rate of 4.5 %. As sited by many economists, endogenous rather than the exogenous factors triggers the growth of an economy (Alfaro et al, 2005). The Asian tigers such as Taiwan, Hong Kong, Singapore and South Korea have been successful in converging with the developed countries. An economy is said to have achieved economic growth, if it is able to produce more goods and services than what it used to produce initially. Economic growth is often related with technological progress. If an economy has achieved growth than the standard of living of its citizens also improves. In US, the economic growth occurred with the introduction of high technology in the country. Financial development also follows from the economic growth. This is due to the fact that if an economy is financially sound then its economy is also developed. Association between Economic Growth and Macroeconomic Convergence Economic growth takes place in a country whenever the resources are utilised more efficiently (Romer, 2007). As per the neoclassical growth theories, a country converges to its steady state rate, if there exists diminishing returns from investing in the physical capitals. Poorer economies have a greater tendency to converge owning to its high marginal productivity. This process of convergence which eventually leads in the equalisation of the per capita incomes amongst the countries is called absolute convergence. If for a country the convergence takes place both in terms of growth rate as well as income levels than the process becomes beta convergence. According to the idea of club convergence, if countries have similar initial conditions then they have a tendency to converge. This concept is regarded as sigma convergence. It is also emphasised that if the countries vary in their initial conditions then they will not converge, this could however be overcome if the economic policies could eliminate the variations. Solow growth model emphasise that such variations in a country’s economic policy cannot lead to long run economic growth (Romer, P, 2007). As the scatter plot alongside shows, the association between average annual growth rate and real GDP per capita need not be associated similarly for all nations, even though they are featured by similar initial characteristics. A country’s economic growth is measured by its level of technological progress. According to the endogenous growth theory, creation of enlarged market in an economy leads to a better utilisation of economies of scale. This on the other hand has a positive impact on a
Macroeconomic convergence, development and growth.
The process in which the per capita income of the poor economies tends to grow as fast as that of the rich economies is defined as the convergence.The process eventually leads the per capita incomes to converge…
According to the paper, the developing economies have the advantage of diminishing returns to factors, so they can converge faster than developed economies. Convergence depends on various factors such as the speed of capital formation, population growth and the presence of efficient economic policies as well as appropriate financial institutions.
Broadly, this empirical study focussed on the subject of financial development and economic growth. In specific terms, the study will seek to explore the relationship between monetary policies and real estate development. Further, the study will narrow down on the impact of interest rates on the value of residential properties in the Czech Republic (Arner, 2007, p.
This paper addresses the major growth processes in two-year old infants. It provides a summary of Berger’s The Developing Person through the Lifespan chapters five, six, and seven. The summary to chapter five highlights the physical growth of infants. This includes the acquisition of different motor skills and other biosocial development processes.
erve Bank of Australia (RBA) was established in the year 1959. The creation was put into place by the reserve bank act 1959. The act lays down the roles of these bank a puts it that this is not a profit acquisition bank. The bank introduction has seen many improvements in the economy of Australian.
The essay will discuss the impacts created by this financial crisis on different economies in the world. This part of the essay will concentrate on the growth of real Gross Domestic Product, inflation rate and unemployment rate in Australia, United States and United Kingdom.
"Convergence is predicted to have a massive financial impact on TMT industries, over the next five years. Based on industry analysts' outlooks, between 2005 and the end of the decade, TMT practices of DTT member firms forecast the generation of at least a trillion dollars revenue from emerging convergence products as well as services.
What explains the divergence And perhaps equally important, what conditions either lead to further divergences or produce convergence North (1990, pp. 6-7).
In the context of the present paper, the above questions have two implications. First, what macroeconomic policy-mix is conducive to economic growth Second, why do governments of some countries adopt the optimal policy mix and the others do not There has been extensive research into the first question with regard to open developing economies (see for example, Little et al., 1993; World Bank, 1987).
on on the implementation of and follow-up to major United Nations conferences and summits, focusing on the review and coordination of the implementation of the Programme of Action for the Least-Developed Countries for the Decade 2001-2010.
Introducing the annual progress report
Mendenhall et al. (1995) illustrate this by the following statements:
Cultures vary from country to country. Management approaches that are effective in one location may not be so in another. Cross-cultural understanding is one of the most important