Question

Identify one developed and one developing country. Research their recent economic growth rates. Analyze differences in the countries that would help lead to different rates of economic growth. In your response, be sure to avoid analyzing short-run factors of economic performance and focus on the factors that affect long-run economic growth.

Answer 1

Introduction

Growth is one of the key factors which each country evaluates over time and wants to excel in. This translates into the availability of goods and resources in a country, the strength of ones currency when compared to the rest of the world, and factors such as nutrition, healthcare and education availability.

Over a period of time, some countries have excelled over the others, primarily because of the availability of higher resources, better manpower management, and factors such as excellent technological development or in general because they are geographically placed in a location which offers higher advantage.

The countries across the globe are basically categorized as developed, developing and underdeveloped on the basis of this classification respectively. Growth rates are usually described in countries on the basis of their gross domestic product which measures the total value of final goods and services which are generated during a year in the economy. This serves as a standard for comparing different countries though other factors are also important in judging the quality of this growth such as distribution of income.

Case Specifics:-

Identify one developed and one developing country. Research their recent economic growth rates.

For the purpose of analyzing this case study, we have chosen the United States and India as the country of our choice respectively.  While, the United States is a developed country which has higher levels of productivity and is well known across the globe for its technology and innovation, India has sprung up as one of the constant high growing economies in which growth tends to be two digits normally and is excellent compared to other counterparts. India has seen an IT boom and is well known for providing services to the rest of the world respectively.

The growth rate of the United States as measured in the year 2017 was said to be around 2.5% while that of India was 6.7 % Respectively.

Analyze differences in the countries that would help lead to different rates of economic growth. In your response, be sure to avoid analyzing short-run factors of economic performance and focus on the factors that affect long-run economic growth.

The main reasons for the differences in growth pattern in India and the United States is because of the volumes of their economies. Each country is compared with itself and the US growth rates are lower because of its scope of increasing infrastructure and other facilities is relatively lower when compared to India which sees majority of its population living below the poverty lines and has only elevated its status post 1991 when the country opened up its doors internationally and converted into a free trade economy from a socialist one.

The major long term reasons for growth rate in the United States to be significantly lower than India is because the economy already has maintained a reasonable standard of living and the spending is compared to itself the United States exports are valued for example at 1.56$ trillion whereas India is only at $301.0 billion. The differences which arise therefore are because India has to grow from billions whereas USA's percentage change is being measured by its own development standards which are hard to beat.

Further, India has a higher opportunity to grow whereas the United States has already crossed the stage of growth and is a stable economically developed nation.

Conclusion:-

Thus, one can reasonably say, that the United States and India have different growth levels because each economy compares its growth trend with itself. India finds itself growing more because majority of the areas still are to receive the benefits of economic development.

United States on the other hand sees majority of its people living relatively comfortably as compared to the rest of the world, and since the stage of economic development is not growing but rather stable the country sees a relatively lower percentage increase in the gross domestic product respectively.

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