Economy of Australia - Assignment
Added on 2021-05-30
25 Pages4500 Words66 Views
Mechanical EngineeringEconomics
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Running head: ECONOMY OF AUSTRALIA Economy of AustraliaName of the StudentName of the UniversityAuthor Note
ECONOMY OF AUSTRALIA 1Introduction The global economy has experienced considerable dynamics over the last fewdecades, owing to the different international as well as country specific phenomena across theworld, occurring over time. While the international phenomena include those ofGlobalization, industrial revolution, trade liberalisation and technological as well asinfrastructural innovations, the internal ones include the economic changes undergone by thecountries individually over the years (Petit, 2013). Much of the internal economic changes occurring in the countries and their economicgrowth and performance of different indicators, over time, can be attributed to the policyframework present in the country and the economic strategies and usage of tools by thegovernment of the countries to regulate the economy, in order to achieve their specificcountrywide objectives (Agénor & Montiel, 2015). The economic policy frameworks playutterly crucial roles in influencing the performance of different economic variables, therebyinfluencing the overall productivity in the economy as well as other indicators of economicwelfare like inflation, unemployment, consumption, investment, government expendituresand others. Keeping the above discussion into consideration, the concerned essay tries to discussthe current macroeconomic situations present in one of the most developed and stableeconomies across the globe, that is the Australian economy. Highlighting the performance ofthe concerned economy, with the help of the dynamics experienced by the same in theprimary economic indicators, the essay also tries to discuss the and critically evaluate theroles played by the monetary policy structure of the country, as a stabilisation tool for theeconomy.
ECONOMY OF AUSTRALIA 2Australia: Economic Overview The economy of Australia can be considered as one of the most stable and prosperingeconomies in the global framework over the decades, highly known for its unique and one ofthe largest mixed economic structures, highly developed and prospering industrial and servicesectors, huge economic prosperity and a unique inherent economic stability, much of whichcomes from its efficient and stable policy framework (Dyster & Meredith, 2012). Being thesecond wealthiest nation in the global framework and fourteenth largest nation globally, interms of Nominal GDP, the economy of the country has a dominating service sector and alsoenjoys huge international trade relations with almost all the major economies in the globalscenario. Economic performance of Australia over the decades The primary indicator of economic performance of a country is the dynamics in theGross Domestic Product of the same over the years. This indicator, by measuring the sumtotal value of the final commodities and services produced within the geographical domain ofthe country within one economic year, shows the overall economic productivity of thecountry over the years. GDP of Australia Keeping the above discussion into account the GDP of Australia, over the years, can be seenas follows:
ECONOMY OF AUSTRALIA 3Figure 1: GDP of Australia (2000-2018)(Source: Tradingeconomics.com, 2018)As can be seen from the above figure, over the last two decades, the economicproductivity of Australia has maintained an overall increasing trend, barring the years from2013, in which the trend of the same can be seen to be somewhat declining, signallingtowards a comparative stagnation of the economy in the last few years (Dyster & Meredith,2012). Figure 2: GDP growth rate of Australia (2000-2018)(Source: Tradingeconomics.com, 2018)
ECONOMY OF AUSTRALIA 4The GDP growth dynamics of the country can also be seen to be experiencingconsiderable fluctuations, both positive as well as negative, over the years, which with theiralternative trends points towards the presence of business cycle in the economy. The growthrate of GDP of the country can however be seen to be showing tampered trends in the lastfew years, thereby pointing towards the stagnancy which the economy has been experiencingin terms of productivity over the last few years (especially post 2010) (Gibson-Graham,Cameron & Healy, 2013). However, apart from GDP, the economy of a country and its performance, the overalleconomic scenario of a country also depends on other factors and can be shown with the helpof other macroeconomic indicators, which in case of Australia can be seen as follows: Inflation Rate in Australia One of the primary macroeconomic indicators of welfare and performance of anyeconomy id the rate of inflation prevailing in the economy, which shows dynamics in theaverage price levels of commodities prevailing in the country over the years. Keeping thisinto account, the rate of inflation and its dynamics in the economy of Australia, over the lastfew decades can be seen as follows: Figure 3: Rate of inflation in Australia (2000-2018)(Source: Tradingeconomics.com, 2018)
ECONOMY OF AUSTRALIA 5From the fluctuations in the rate of inflation in Australia, it can be asserted that theprice levels in the country have been subjected to considerable dynamics over the last fewdecades (Kumar, Webber & Perry, 2012). However, the fluctuations in the concernedindicator shows a broadly falling trend in the recent years, with the magnitude of fluctuationsalso dying down in the recent years. Currently, the rate, for the last few years, can be seen tobe ranging between 1.8% to 2.1%. This in turn, however, indicates towards positiveeconomic health conditions in the country. Unemployment rate To understand the overall economic welfare of a country over the years, it is alsocrucial to observe the dynamics in the labour market of an economy and the employmentscenario prevailing in the same. This is primarily because the level of employment reflectstowards the economic abundance with the population of a country, which in turn determinestheir aggregate demand pattern, which in turn, by influencing the overall aggregate supply,have impacts on the overall economic productivity of the country decades (Kumar, Webber &Perry, 2012). Keeping this into consideration, the unemployment rate of Australia, over thelast few decades, can be seen as follows: Figure 4: Rate of unemployment in Australia (2000-2018)(Source: Tradingeconomics.com, 2018)
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