Macroeconomics and Microeconomics Influences on Level of Inequality and Sustainability in Development Policy
Added on 2021-02-18
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DEVELOPMENTECONOMICS
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1a.) explanation of 3 macroeconomics and 3 microeconomics influences on level of inequalityand sustainability in development policy ...................................................................................1b.) explanation on how to carry out development policy with emerging consensus betweenmacro and micro development economists.................................................................................2TASK 2............................................................................................................................................3a.) strength and limitations of four classic indices which used to measure sustainabledevelopment................................................................................................................................3b.) comment on modern indicator that is Happiness which is known as the best indicator ofdevelopment................................................................................................................................4TASK 3............................................................................................................................................5a.) explanation on following obstacles which create middle-income trap in China...................5b.) explanation of three traps which affecting China to become the world leader......................6TASK 4............................................................................................................................................6a.) development status of European union..................................................................................6b.) comparison of Dependency ratio of European union, United states of America and China.8c.) comparison of all incomes which expressed in 2005 USD PPP............................................8TASK 5..........................................................................................................................................15Economic development theory which contrast realities of the European union, united states ofAmerica and China....................................................................................................................15TASK 6..........................................................................................................................................16Discussion on trends, problems and challenges of development feed by UNDP-UNRISDreport.........................................................................................................................................16TASK 7..........................................................................................................................................17Explanation of five ways which affecting practitioners of international development 2030agenda.......................................................................................................................................17TASK 8..........................................................................................................................................18Explanation on UN's sustainable goals which has stalled in recent years................................18
TASK 9..........................................................................................................................................19Discussion on BRICS nations which spearheaded by China, which is representing challengesto global leaders of countries and explanation of power shifts.................................................19TASK 10........................................................................................................................................19Detailed appraisal for both given considerations......................................................................19CONCLUSION..............................................................................................................................20REFERENCES..............................................................................................................................21APPENDIX....................................................................................................................................231. China ....................................................................................................................................23
INTRODUCTIONThis assessment provides an information in two different units. In first five tasks,assessment provides information regarding sustainable development of countries. This presentreport provides explanation of development policy which helps in sustainable development incountries. New economic indicator is also explained in this report. Further, study is done oneconomic development theories and new agenda of 2030 to achieve sustainable developmentgoals across the nations.TASK 1a.) explanation of 3 macroeconomics and 3 microeconomics influences on level of inequality andsustainability in development policy In recent years, there has been decline in a global income inequality. According to Giniindex, some developing countries has achieved relatively strong economic growth. ParticularlyChina and India are on top which has achieved tremendous growth in its economics. But thereare some micro and macro economic factors which are overall affecting level of influences andsustainability in development countries (Boianovsky, 2019). Micro and macro economic factorwhich affect income inequality and sustainability are as follows-Macro level variable factors:Unemployment: this is the factor which badly affecting level of income inequality andsustainability in developing countries. Government policies needs to be more effective whichoverall helps in creating productive employment in developing countries. With the currentsurvey, there is more population growth in developing with they unemployment is a factor whichbadly affecting standard of living of people of society.For example: in developing countries,average income of richest 10% population is measured as nine times that of poor 10% peoples.In UK, unemployment rate has been rises at faster rate in recent five years. Official figure whichrepresent measure of jobless people is almost 1.47 millions. If wealth of UK is considered thandata obtain is considered as there are only 1% of rich people among 20% of poor people whichcreates as level in inequality. There are millions of children and peoples who are jobless and willnot able to earn for their families because of unemployment rate in country. For example in US, income inequality is continuously increasing. It is happening theirbecause rich are getting richer and poor are getting poorer. It is said that inequality is mainlyconsidered with people who don't spend much money which affecting the economy of country. 1
Level of inequality with unemployment is mainly occurring in developing countries ofnation. According to a statistics, in India unemployment rate is increasing with 18.6 million andin China number of unemployment rate is increase with 37.6 million. This data shows that thereis huge level of income inequality in countries across the nation.Poverty: this is the another factor which also influencing level of inequality andsustainability in developing countries. According to survey it is indicated that about 162 millionpeoples across the world living in ultra poverty. For example: in UK, there are approx 25.3% ofpopulation living under the poverty line which is the huge data that shows level on incomeinequality in UK. Compared to other developed countries of nation, there is a high level ofincome inequality. As there are less jobs people are not able to earn for their families by whichpoverty in UK is substantially increasing. Economic growth of country does not affect povertybut it is affecting standard of people living which overall affect growth of country.Poverty is the factor which has almost affected all countries of nation. US is also oneamong them. According to survey, it is found that there one-quarter of American workers whichearning less than $10 per hour a day which creates a huge level in income inequality. Developedeconomy is showing that rich people getting richer and poor people getting poorer by which inequal income distribution is not reducing in countries.Demographic changes: changes demographically in countries majorly influencing levelof inequality and sustainability. Demographic change directly affect GDP growth of country(Tamura and et.al., 2019). Increase or decrease in GDP will majorly affect income level,accumulation level, prices of goods, inflation in countries etc. for example:-There are variouschanges which took place in UK like technological changes, education changes which havemajorly created unequal distribution of income, where skilled worker are getting higher incomein comparison to unskilled workers. This difference in pay scale in workers at same stage ofwork is majorly creating unequal income distribution which overall affecting economicdevelopment of country. Income inequality in US has increased with past 30 years. It is because incomedistribution in country in unequal which means that those who are at top of income spectrum aregetting higher income as compared to people who have less income earning. With currentchanges like technology, trade and institutions are the main factors which creating level of2
inequality in countries. Demographic changes occurs with rising population, rising poverty andrising unemployment rate in countries which overall affecting GDP of country.In developing countries, major demographic changes are with rising poverty and risingunemployment with increasing poverty which overall creating high income inequality acrossnations. Other factor which affecting GDP of developing country is majorly taxed evasion,corruption and smuggling in country which badly affecting growth of countries.Micro level variable factors-Education: countries which have high literacy rates will always be able to develop agood sustainable development for its country. Low literacy rate will always be a factor whichmajorly affect growth of country and standard of living of society of country.For example:- inUK, payment of skilled workers is higher than payment of unskilled workers. This shows thateducation pays an important role for the development of economy of country. There are people'swho are not completing their education because of less earning of family which overall affectinggrowth of economy of country. This is the problem which mainly create unemployment indeveloped country with this level of income inequality is get generated in economy of nation. In developing nation, education is the main factor which create unequal incomedistribution. Corruption, smuggling and evasion tax is only get happened in countries wherepeople are less educated. Some People are not that much capable to pay fees of collegeinstitutions and are not able to afford private school fees by which they prefer to remainuneducated which creates unequal distribution in developing nations.Health: it is defined as the difference between health status or distribution of healthdeterminants among different population group of countries. Society which facing poverty willnot be able to improve its health as possible which affect sustainability and inequality indeveloping countries. For example:- in UK and US, majorly people are suffering from obesityand are not able to work for whole day. This problem of obesity is the main concern forlegislation. Diseases like obesity, hypertension and diabetes are majorly found in people of bothnations which badly affecting growth of economy. b.) explanation on how to carry out development policy with emerging consensus between macroand micro development economistsDeveloping economy is split between micro-development economist and micro-development economists. Micro-development economist will only consider on factors like3
microfinance, education, health and other social programs of country and macro economist willonly consider factors like economic growth, international trade and fiscal policies of thegovernment of countries (Tomos and et.al., 2019). Macro-development economists will onlyfocus to recognise competitive advantages which they have recognised using experimentalapproach and micro-development economists will focus to find utility of randomised evaluationin their approach. Role of both macro and micro-development economists is to find factorswhich overall helps in developing policy which improve economic conditions of the country. Micro development economists are more interested in developing effective factors whichhelps in developing effective policies. Both economists have motive to find factors which workand which does not work for the development of country. Role of economists is to find evidenceswhich provides an information which is more efficient for the development of economy ofcountry. Information’s which developed by the economists needs to informative so that economywhich needs improvements with both micro and macro factors will get developed in developingcountries. For example:- in 2017, there are 13 economists who have done effective research thatshaped world and among 2 are the Nobel Prize winners. These are the economists who predictsglobal financial crises so that policies get developed prior to face recession period in country.For example- there are 60 private sector economists who have surveyed and predictedthat 2020 is for recession period and 21% of economists have surveyed that recession will hit thefan by 2021 as well. The prediction of this survey is same as 2008 recession prediction wherethere are people who have lost with their retirement savings. Prediction for 2020 and 2021 issame for world economy where economists have predicted that it will majorly will affect poorworking class peoples of countries.Both micro and macro-development economists provides their study which is based onboth qualitative and quantitative surveys. But one of the potential problem in doing study is thatmany countries did not have experienced either cost sharing or free distribution programs.Therefore, to develop the effective policies both macro and micro-development economistsprovides proper research of factors by which economic conditions of country get improved(Roth, Hahn and Spinath, 2017). 4
TASK 2a.) strength and limitations of four classic indices which used to measure sustainabledevelopmentThere are various indices which are used for the sustainable development of countries.Therefore, four induces used are gross domestic products, the human development indexes, GNPper capita and gross national products. Strengths and limitations of these indices are as follows-Gross Domestic ProductThis is the factors which help in recognising how much money a country makes from itsproducts throughout the year. For example:- GDP of 4% shows that there is a growth in economyby 4% in comparison to last year. Therefore, GDP is considered as the national income fordevelopment of economy. It also helps economists to get idea for nation's financial viability. Ifnominal GDP was considered as $200 billion due to increase in level of price in comparison toanother year GDP which is $170 billion then it will reflect change in price only.Its advantages are:-This method helps in providing effective analysis and measure of economic activitywhich is through growth rate of country and changes in economy of the country. It alsohelps in providing rage of economic information which helps in determine strength andweaknesses of various sectors of country.It also helps analyst to implement economic policy which provides a effective growth tocountry.Its limitations are as follows- It does not include non-market activities. Such activities based on the production andconsumption occurs outside the market economy such as unpaid house workers,volunteer work etc.The human development indexThis index is known as composite statistic which is calculated on four basis whichincludes life expectancy index, education index, mean years of schooling index, expected yearsof schooling index and income index. Its strength is as follows-5
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