Summarize the factors affecting economic growth, macroeconomic trade-offs, and identify a major macroeconomic viewpoint. Pick another country to discuss: what is the magic of sustained growth?
In order to achieve long-term growth of economy and create the effective strategy of development it is important to formulate the main factors affecting economic growth, macroeconomic trade-offs. Then we should identify the benefits caused by achievement of sustainable development on the example of another country. For this end we have chosen sustainable economy of Japan.
Direct factors are elements that make economic growth physically possible. This group includes:
the quantity and quality of labor resources, the quantity and quality of natural resources, the volume of fixed capital, technology and organization of production, the level of development of entrepreneurial abilities in the society. The main indirect factors providing increased economic performance of the country are the decrease in the degree of monopolization of the market, the tax climate in the economy, the effectiveness of the credit and banking system, increase in export deliveries, the current system of income distribution etc.
Macroeconomic trade-offs are influenced by the current economic situation. They should be obligatory taken if the benefits of such strategy are higher than profits provided by the other ways of governmental behavior. The major economic viewpoint is the macroeconomic policy of stabilization. Stabilization policy is represented by the management of aggregate demand in the economy through fiscal and monetary policies to mitigate or even eliminate the fluctuations in economic activity (real GDP and employment). It is usually associated with economic or business cycle.
There are different approaches for definition of sustainable growth achieved by Japan economy. Nevertheless the magic of this situation may be explained by real economic reasons. The achievement of Japan's success in economic transformation happened as the result of the possession of "three holy values" including the system of lifetime employment, the system of official subordination and unity structure enterprise. Furthermore the macro-economic trade-off was also successfully achieved.
References
Phillips, Roger. The principles of successful economies. London: LNP, 2015.
