Asiaphoria and Volkswagen: Short Answer Questions

This article answers short answer questions on Asiaphoria and Volkswagen, including the central argument of Asiaphoria, agreement with the statements of Pritchet and Summers, and implications of Asiaphoria argument for Volkswagen AG.

Running head: SHORT ANSWER QUESTIONS
Answering questions on Asiaphoria and Volkswagen
Name of the student:
Name of the university:
Author note:

1
SHORT ANSWER QUESTIONS
Table of contents
Central argument of Asiaphoria by Pritchet and Summers........................................................2
Agreement with the statements of Pritchet and Summers and assessing its compatibility with
BRICs thesis...............................................................................................................................3
Implications of Asiaphoria argument for Volkswagen AG.......................................................4
References and bibliography......................................................................................................6

2
SHORT ANSWER QUESTIONS
Central argument of Asiaphoria by Pritchet and Summers
In the arguments of Pritchet and Summers, four dimensions of Asia’s growth are
highlighted. These four dimensions project the acceleration of growth in the domains of
China and India since the 1980s. Since then, both the countries have achieved profitable
growths. This was reflected in the era of 1990 (Summers and Pritchett 2014). In the mid
2000, India witnessed an escalating economy. The major drive behind this was the high
compound interest for a considerably long time. Along with this, large population added to
the economy. Pritchet and Summers feel proud to point that that China and India have been
declared as one of the largest economic power in 2011. This is in terms of investing in
Purchasing Power Parity (PPP) (Summers and Pritchett 2014).
The arguments of Pricket and Summers centers around “regression to the mean”, the
keystone towards the achievement of sustainable growth in the threshold of India and China.
At the initial stage, they draw the attention of the readers towards the regression of 1990,
which escalated the gross domestic product per capita (Summers and Pritchett 2014).
Drawing the statements of Bill Easterly and Micheal Kremer compels Pricket and Summers
to predict a low growth for China and India in the near future. The reason behind this is the
regression of mean in the growth process. One of the other reasons for this might be the
difference in the economies of India and China in terms of growth.
Pricket and Summers point out the importance of knowing the current growth rate for
making estimates about the growth India and China would achieve in the coming years.
Making tables and charts for the current growth rates is a wise step in this direction. As a
matter of specification, the typical components of this estimation are extrapolation and
exclusion (Summers and Pritchett 2014). Forecasts about the future growth process of China
and India aligns with the fourth dimension of this growth story. This is where Pritchet and

3
SHORT ANSWER QUESTIONS
Summers asks the readers to interpret the outcomes. In terms of the present economic rates of
China and India, the wait is to see whether they emerge successful in keeping up this pace.
Agreement with the statements of Pritchet and Summers and assessing its compatibility
with BRICs thesis
BRICS is the short form for Brazil, Russia, India, China and South Africa. Viewing it
in the form of a thesis, these four countries are perceived as developing in the present
competitive pace of the economy. In terms of Pritchet and Summers’ arguments, China and
India can be placed on a higher pedestal than Brazil, Russia and South Africa. In the thesis
proposed by Jim O’ Neil, it is stated that these countries possess the capability of becoming
dominant economies by 2050 (Goldmansachs.com 2018). According to the statements of
Pritchet and Summers, if China and India consistently seek innovative ways and means, they
would be able to emerge as a global economic leader. Jim O’ Neil’s states the huge share,
which these countries have in the economy. In terms of land coverage, Brazil, Russia, India,
China and South Africa accounts for 25% of the world’s land coverage. Population wise,
these countries accumulate 40% of the world’s total population.
One of the other facts, which Jim O’ Neil points out, is that the biggest and fast
growing markets, which these countries possess. Nuclear cooperation with India is one of the
steps, which the other economies have taken towards enhancing the stability in the
relationship (Berg 2016). This enhancement is the keystone towards stabilizing the economy
in the competitive ambience of the market. The BRICS thesis emphasized the alterations,
which these countries have brought about embracing globalization. This fact reflects the
political support for stabilizing the economy, contradicting the self efforts of the economic
powers to achieve a sustainable growth.

4
SHORT ANSWER QUESTIONS
Follow up of the BRICS report in 2004 indicated an increase in the annual income of
the people, especially those belonging to the middle class. This prediction resulted in an
escalation in the demand for the high priced goods. In this, China was placed ahead of India,
because of a strong infrastructure. However, the mutual agreements in the political,
economic, social parameters generate hope regarding the infrastructural development of India
in terms of competing with the other global powers (Herndon, Ash and Pollin 2014).
Consideration of these parameters is an extension to the current GDP of India and China, as
proposed by Pretchet and Summer.
Implications of Asiaphoria argument for Volkswagen AG
The tagline of Volkswagen’s annual report highlights their struggle towards giving a
new definition to mobility. 3.8% growth in the vehicular production and 1.9% rise in the sales
revenue adds colour to this struggle. Penetration into the global markets is also a factor,
which accounts for the global mobility of the Volkswagen. Renovation of the brand aligns
with Jim O’ Neil’s assertion regarding emergence as a global economy (Vw.com 2018). This
is because renovation would include the current growth rate, which needs to be modified for
achieving infrastructural development. This development would in turn enable the
Volkswagen personnel to accumulate more shares in the foreign market.
One of the parameters of the renovation can be revision of the prices of the
automobiles. This revision would be beneficial for the customers of middle class to purchase
the cars and bikes of their choice. Volkswagen personnel need to ensure that the growth,
which they have achieved, persists. For this, they need to conduct statistical analysis of the
achievements (Jorgenson, Gollop and Fraumeni 2016). Performing this analysis in the
meetings would produce positive results as the personnel would come to know about the
approaches of the stakeholders and shareholders. Negligence towards the current growth rates

5
SHORT ANSWER QUESTIONS
would broaden the economical difference between the countries like India and China. This
differentiation would add vulnerability in their position, adding a hypothetical perspective to
BRICS thesis (Goldmansachs.com 2018). Evaluation ties the arguments of Summers and
Pretchet and BRICS thesis in a common thread. This is because evaluation holds the power to
upgrade the standard and quality of the business activities of global economic leaders.

6
SHORT ANSWER QUESTIONS
References and bibliography
Goldmansachs.com (2018). Building Better Global Economic BRICs. Available at:
http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/build-better-brics.pdf
[Accessed on 15th February 2018]
Herndon, T., Ash, M. and Pollin, R., 2014. Does high public debt consistently stifle economic
growth? A critique of Reinhart and Rogoff. Cambridge journal of economics, 38(2), pp.257-
279.
Jorgenson, D., Gollop, F.M. and Fraumeni, B., 2016. Productivity and US economic
growth (Vol. 169). Elsevier.
Marglin, S.A., 2014. Public Investment Criteria (Routledge Revivals): Benefit-Cost Analysis
for Planned Economic Growth. Routledge.
Piketty, T., 2015. About capital in the twenty-first century. American Economic
Review, 105(5), pp.48-53.
Solow, R.M., 2016. Resources and economic growth. The American Economist, 61(1), pp.52-
60.
Summers, L.H. and Pritchett, L., 2014. Asiaphoria meets regression to the mean. NBER
Working Paper No. 20573 (Cambridge, Massachusetts: National Bureau of Economic
Research, October).
Van den Berg, H., 2016. Economic growth and development. World Scientific Publishing
Company.
Vw.com (2018). About us. Available at: http://www.vw.com/ [Accessed on 15th February
2018]

7
SHORT ANSWER QUESTIONS