Case Study on The Asian Tigers and Economic Growth Lessons

a) Explain the differences and the similarities between the economic growth and the economic development, highlighting the aspects indicating the Asian Tigers development with the appropriate illustrations from the case context.

Economic growth and the economic development have some differences as well as the similarities. The differences between the Economic growth and the economic development is as follows:

Economic growth is not a broad term and a broad concept, the concept of the Economic growth is narrow. Economic Growth is the increase in the national output of the company in the real level and this increase in the national output can be due to the many reasons. The reasons include the increase in the quantity of the resources, quality of the resources, improvements in the technology and in other ways we can say that the increase in the goods and services value, an increase in the values of the goods and the services produced by the different industries and the different sectors of the economy. The economic growth can be measured by the increase in the GDP of the country.

Whereas on the other hand, the economic development is a normative and broad concept. Economic development is the improvement and increase in the standards if the living, also an increase in the needs of the self-esteem and to get the freedom for the greater choices as well as the freedom. The most accurate and the efficient method that can be used by the pope to calculate the economic development is by the HDI (Human Development Index) because by looking at the human development index we can be able to know about the life expectancy of the country and the literacy rate as they are responsible for the productivity of the country and the productivity of any country leads to the growth of the economy. And due to this, more opportunities are created in different sectors of the countries including the employment, education, conservation of the environment and the healthcare. (Qoura, 2018)

Whereas, there are some similarities as well between the economic growth and the economic development; both bring the quantitative changes in the economy. Both the economic growth and the economic development are seen as a movement forward to improve the situations of any country and or any nation. Both leads to the improvement of any country or nay nation.

The Asian Tigers development was caused by the several factors. At first, the Asian Tigers have lack of the natural resources and a small amount of the farmland on which they can perform the agricultural activities, but after the certain time, some development policies were developed by the government and all these countries stared to grow in the most possible ways. Because of the growth in the countries with the passage of time, in the 1970’s the electronic revolution in the countries occur and this leads to the development of the countries, moreover the policies of the government and the free trade and the free market allow the Asian Tigers to develop more and with the passage of the time The Asian Tigers become of the most developing countries. The growth rate of these four countries were increased and there has been the development and the advancement of the technologies and the industrialization has increased in these four countries during the years of the1960’s and the 1990’s. And at the beginning of the 21^st century, the Asian Tigers become one of the most developed and the advanced and the high-income economies because of the free trade and the large exploring networks by using the mixed regimes and the trade regimes as this accelerated the growth of the economy.  And moreover, the countries become more developed due to the intervention of the government, as the government has increased the spending’s on the education and the political systems and the non-democratic systems. These all things help the Asian Tigers to develop and become one of the most famous developed economies of the world. (BLOOMENTHAL, 2019)

b) Discuss any four macro-economic indicators with a detailed illustration with respect to the indicators from the case study.

There are many economic indicators but the main indicators that are used in this case study includes the following:

GDP: And indicator that is used in the case study is the GDP, as all the four countries and their development is seen by the GDP, that how much GDP is produced by every country, because the GDP of a country represents its economic growth. The Asian Tigers indicators of the GDP were shown in the case study, showing the GPD rate in the 2011. And according to the repost of the 2011, the highest GDP nominal millions of UDS was of the South Korea, the South Korea economy was the largest grown economy according to the 2011 with the GDP of 1,163,847. So, GDP is a main economic indicator in this case study. The next economic indicator is the HDI (Human Development Index), the Human development index is another economic indicator used in this case study. According tote Human Development Index, Honk Kong and Singapore is ranked on the 15^th number with HDI of 0.981, Taiwan is ranked, 22^nd number with the HDI of 0.882 and Singapore is ranked 9^th with the HDI of 0.901. Human Development Index is important in developing the economy of the nation, so it is a basic indicator of the economy.

The next indicator of the economy is the Global Well-being Index, it defines the well-being of the individuals and the populations and the pope leaving in the country. The well-being of the people is important in indicating the economic growth. According to the Global Well-being index, the percentage that was thriving in 2010 was; Hong Kong and Singapore with the percentage of the 19%, Taiwan with the percentage of the 22% and South Korea with the percentage of the 28%.A all these things define how much stable the economy for the Asian Tigers was in the previous years. The last economic indicator that I found basic in this case study is the Consumer price index. As there in all the four countries, there is a free market and trade in the economy and due to the free market and the free trade, the companies and the industries are charging the highest prices from the consumers that the consumers are willing to pay. Consumer price index is the index in which the inflation of the country or the deflation can be measured. So, the CPI is one of the economic indicator that is used in this case study. (DEPERSIO, 2019)

Q 2) Discuss the GDP, highlighting the components and methods of calculating GDP.

      The total value of. anything that is produced in the country is known as the Gross Domestic Product of any country. If the products are produced within the country, they are also included in the GDP.

There are several components of the GDP including the business investment plus the personal consumption expenditures plus the government spending’s also including the exports and imports as (exports minus imports). Firstly, if you identify the components of the GDP then it is easy to identify the methods of the calculating the GDP an it is easy to calculate the GDP. The standard formula that is used to calculate the GDP is the: C+I+G+(X-M).

Moreover, if someone is talking about the size of the economy, they are taking about the GDP of the country, because the GDP of any country shows the economic pattern of any country and sees that if the economy of the country is stable or not.

Still are many different ways to calculate the GDP but before calculating the GDP of any country it is necessary to identify the different types of the GDP that prevails in the country. The types of the GDP are as follows:

The Real GDP: To calculate the Real GDP it is necessary to compare the GDP by year, Before comparing the GDP by year, the EBA removes the inflation effects because of the EBA does not remove the effects of the inflation the it might seem like that the country’s economy is growing but on the other hand the country is suffering from the inflation. To calculate the Real GDP of a country, the EBA uses the prices deflector to calculate it. The price reflector helps you to identify the change in the prices that cured during a year. And after this the price deflator is then multiplied with the nominal GDP. And by this process EBA is bale to make three different distinctions that are important including:

The people and the companies from the outside of the country are not included, their income is not included.

Secondly, the inflation effects or the inflation is taken out from the GDP.

And the last thing is that, the final product that is produced is counted, no other product is counted.

Nominal GDP:

In the nominal GPD, the raw measurement of the increase of the prices is done

GDP Per Capita:

This is an effective method to define and to compare the GDP of different counties. In thus method the GDP is divide by the number of the residents present in the country and through this division we can define the standards if living of any country. And some countries economic pattern and the economic outputs are enormous to the large number of the people living in that country.

The Growth Rate: The growth rate of the GDP is defined as the increase n the rate of the growth from one quarter to quarter. This tells us about the growth of the economy ad the trend of the growth. The trend may be increasing or decreasing. And it tells us how much the growth rate has been in the previous quarter. This shows that if the production is less in the previous quarter then the growth rate is negative but if the growth rate is high in the previous quarter than the growth rate is positive. (Amadeo, 2019)

By identifying all the types of the GDP, we can easily calculate the GDP of the country. Ther is a single method to calculate the GP but the calculation of the GDP depends on the type of the GDP.

Discuss the free market economic policy, highlighting the extent to which the Asian Tigers have benefited from Economic Freedom of their countries in a bi to attain a high export drive?

The free market economy policy is the policy in which the economy is based on the supply and the demand wholly and there is no control of government over the market. The companies of the countries sell the goods and the service at their desired price and ask the highest price of their products to the sellers on which they agree they are willing to pay. The companies change the highest money and prices for the products that the consumers can easily pay and are willing to pay. In this free market policy, when the companies are taking benefit and they are selling the product according to their way then the workers of the company also ask for the high wages and the companies earning the highest revenue in this time, pay their worker’s the highest wages. A free market economy is more of a capitalist economy. And in this capitalist economy, all the companies and the business’s try to operate as effectively as possible to eliminate the risk of the competitors in the market and to avoid the lose of the market share. (DEPERSIO, 2019)

The Asia Tigers have benefited from the Free market and has risen from the crisis it has faced during some years. As in the recession years the exporting industries were benefited from the loans that are given to some export industries. The state imposes the low market interest rates for the loans and these loans are given to the export industries. Moreover, this low market interest rates for the loans drive the free trade in the country and the less government spending. And due to all these things, the Asian tigers enjoyed the high growth rated that ere sustained in the countries for the long time. Two of the development policies were used to stable the Asian tigers in the economy and helped them too gain their position in the economy and helped them to raise form the crisis. These policies include the factor accumulation and the macroeconomic management.

Moreover, the export policies that ere developed in the countries help the Asian tigers to get the freedom in the market the approach of the export market was different among the four nations. In the Singapore and the Hong Kong, trade regimes were introduced and these trade regimes were neoliberal and these trade regimes encourage the free trade among the countries. While the other two countries, Taiwan and the South Korea used the mixed regimes instead of the trade regimes and using the mixed regimes help them to accommodate their own export industries and the companies. As well as there is a role of the government as well because the government of the Taiwan, South Korea and the Singapore also contributed and they have worked to promote the exporting industries and this method of the government supporting the export industries is known as the export push strategy. By all these policies and the support of the government all these policies helped the Asian Tigers to take benefit from the free market and drive the high export. Asian tigers has taken the benefit from the free trade wholly and implement in their countries to take the benefit from it.

References on The Asian Tigers and Economic Growth Lessons:

Amadeo, K. (2019, November 28). Gross Domestic Product and How It Affects You. Retrieved from the balance.com: https://www.thebalance.com/what-is-gdp-definition-of-gross-domestic-product-3306038

BLOOMENTHAL, A. (2019, August 26). Four Asian Tigers. Retrieved from investopedia.com: https://www.investopedia.com/terms/f/four-asian-tigers.asp

CHEN, J. (2019, July 27). Consumer Price Index – CPI. Retrieved from investopedia.com: https://www.investopedia.com/terms/c/consumerpriceindex.asp

DEPERSIO, G. (2019, February 19). What Are Some Examples of Free Market Economies? Retrieved from investopedia.com: https://www.investopedia.com/ask/answers/040915/what-are-some-examples-free-market-economies.asp

Pamela Radcliffe, P. U. (2017, December 1). Asian Tigers: Economics and the Development of the Asian Nations. Retrieved from thegreatcoursesdaily.com: https://www.thegreatcoursesdaily.com/asian-tigers-economics-asian-nations/

Qoura. (2018, September 22). What is the similarity between growth and development? Retrieved from qoura.com: https://www.quora.com/What-is-the-similarity-between-growth-and-development

Winkler, J. (2017, July 3). The 4 Asian tigers economy growth. Retrieved from docurex.com: https://www.docurex.com/en/four-4-asian-tigers-economy-growth/