Economics: Economic Development and Asian Tigers

Running head: ECONOMICS
Economics
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ECONOMICS
Answer 1
The economic development is much broader concept than the economic growth. The
economic development is the increase of real national income of the economic structure of
any country for a long period of time. On the other hand, economic growth refers to the
expansion of the gross domestic product of the country (Dayley 2018). The economic
development is related to both underdeveloped or developing countries of the world where
economic growth is the subset of economic development. The economic growth is the
macroeconomic phenomena that will be explaining the remarkable differences in the living
standard and income who live across countries.
The Asian dragons is the term used for Hong Kong, Taiwan, South Korea and
Singapore for maintaining exceptionally high growth rate in the economy. There had been a
rapid industrialization taking place between 1960s and 1990s. Presently, all the four
countries have developed into high income economies. These Asia Tigers were the first
newly industrialized countries since they had the high growth during the 1990s. The four
economies are presently well rich economies. It have been found out that all the four Asian
Tigers is known to have a highly educated as well as productive work force (Cherif and
Hasanov 2015). The economic development is related to both underdeveloped or developing
countries of the world where economic growth is the subset of economic development. The
economic growth is the macroeconomic phenomena that will be explaining the remarkable
differences in the living standard and income who live across countries. The potential for
development is very much related to the initial condition for the country which are known to
be specified by the conditional convergence theory.
Both the natural resource as well as the geographic condition of the countries are
known to affect the economic growth of the country. The factors which led to the fast and

ECONOMICS
sustainable growth of the Four Asian Tigers are the initial conditions, demographic variables,
policies of the government, geography as well as natural resources (Jia and Chao 2016.). It
has been also found out that the average growth rates of the Asian Tigers had been around 6
to 7 percent during the 1960s. which none of the developing countries have managed to reach
such rates. The openness to trade is one of the most important economic policy which is
known to affect the economic growth of any country. The Four Tigers during the period from
1960 to 1990 had been among the most open countries in the world.
The demographic variables relates to the comparison of the growth rate of the
working age population which relates to the growth rate of the total population. The rise in
the working age population is directly proportional to the economic growth. Referring to the
period of 1960-1990, it have been found out that East Asian Tigers had been characterized by
an increased growth rate of the workforce than the growth rate of the population which also
states that there is an increase in the growth rate of the gross domestic product per capita. The
case of Singapore states that the output growth rate and the growth rate of total factor
productivity have taken a different growth rate. According to (Dayley, 2018 ) the high rates
of the economic growth experienced by the Asian dragons mainly resulted from the
accumulation of physical capital and human capital. It was found out that the technology
played very little role in the economic growth of the tigers which took place mostly because
of capital deepening. Creation of the stable macroeconomic condition acted as the foundation
upon which the Asian miracle was built.
Table 1 Demographics
Countri
es
Area
Km2
Populat
ion
populat
ion per
density
populat
ion of
capital
city
Hong
Kong 1104
721970
0 6540
721970
0

ECONOMICS
Singap
ore 710
539920
0 7605
539920
0
South
Korea
1002
10
504239
55 503
101400
00
Taiwan
3619
3
233868
83 646
268814
0
Answer 2
The free market economy is that economy which is governed by the forces of supply
and demand where there is no governmental influence. The free markets are known to be
characterized by the decentralized order of arrangements by which the individuals will be
making the economic decisions. There are many advantages of free market economy. One of
them is that the free market economy will be allowing for optimum allocation of the
resources. In case of free market economy, producers will also produce what the consumers
will want at a reasonable price.
The economic freedom is the people’s ability of the society for taking economic
actions. Economic freedom is known to bring greater prosperity in the economy. The
economic freedom index will be documenting the positive relationship between economic
freedom and variety of positive social and economic goals. The ideals of economic freedom
are known to be strongly associated with the healthier societies, greater per capita wealth,
cleaner environment as well as poverty elimination. The Four Asian Tigers, South Korea,
Taiwan, Singapore and Hong Kong are specially known for their highly free market as well
as developed economy. These four countries are also known as the Asian Dragon. According
to the Index of Economic Freedom of 2018, South Korea had a total gross domestic product
of US$1.5 trillion with per capita gross domestic product of more than $35,000 where the
growth rate was more than 3 percent. Hong Kong has a freedom for all the activities except
for the defence. The reports of World Bank shows that Hong Kong ranks exceptionally high
on measuring freedom where gross domestic product had been US$340 billion during 2017