Response needed for post #1 below:
I first found it very interesting that the exchange rate and the costs oof good and services were so different that you can’t really compare much to the United States average income. A good measure of the income would be to use the PPP method when comparing incomes, which stands for what people can buy with their money such as housing, food, and cars. This makes more sense due to the fact that money can be worth more or less in other countries.
Are rich countries getting richer while the poor are getting poorer?
Right now, I think covid-19 has brought a lot of countries to a stop when it comes to development and the economy. As shown in the book China and India have been steadily growing, but not all countries have the ability and resources to grow and to get richer. There could also be some religion and cultural influences as well.
Has the United States become more or less economically free and how might this impact the future growth of the US?
This is a hard question, economic freedom means that people have the right to make their own choices but with covid-19 people are out of work and businesses are closing.
How does political decision-making impact the economy?
Political decisions can really impact the economy due to the beliefs such as free trade as well as other relationships the people in power have with other countries. The relationships that are kept or diminished can also have an impact on what goods and services are outsourced, traded, or imported. Politics play a big role in the economy about price also, there are many factors that can drive inflation. I recall when gas was over $5.00 a gallon here in San Diego during 2012-2013.
Response needed for post #2 below:
What struck me as interesting throughout the reading was in regard to China, and how the country itself considered a low-income country yet Hong Kong, which exists within its borders, is considered one of the more free economies in the world. It makes you want to just jump out and tell the rest of mainland China to take the hint and follow what is being done in Hong Kong. This brings me to the last question of the discussion, so I am hopping around a bit but please follow me. A solid indicator of how political decision making impacts the economy can be seen in the current battle between Hong Kong and China. Recently there has been a new law criminalizing dissent, meaning that the citizens of Hong Kong are no longer able to “have an opinion” (Lin, 2020). What has allowed Hong Kong to thrive is the separation from the communist party of China in terms of foreign investment to attract foreign capital. This new law has caused the economy of Hong Kong go take a hit in the financial/investment sector, that is how politics can be seen having a large impact on the economy.
In regard to the rich getting richer and the poor getting poorer, I would have to say that it is still the current path of most countries. There was an attempt with foreign aid to try and level the playing field, but it was discovered that no matter how much foreign aid you pipe into an economy it never seems to help unless there is a complete restructure of the culture/way of life. I feel over time that the United States has started to become less of a free economy and under more control of the government. This poses a problem for future growth because of the bureaucratic red tape to cross.
Response needed for post #3 below:
An interesting observation was Norway’s ranking as the second country on the 2014 per person GDP levels in the high-income countries at $63,999 (Gwartney, Stroup, Sobel & Macpherson, 2018). It was also striking to see countries’ income discrepancies across the three designations, high, middle, and low-incomes. While comparing countries’ income levels and growth rates, the higher growth countries are typically ranked as middle to low-income countries (Gwartney et al., 2018).
According to Zitelmann (2019), extreme world poverty has fallen from 90 to 10 percent over the last 200 years, with an astonishing half the decline recorded in the past 35 years. This has implications for poorer countries, with improvements to living standards and reductions in starvation and poverty. Although the income per person in countries with high economic freedom ratings grew more than twice the average of those in the lowest-rated countries, the poorer countries continue to grow and improve their economic freedom and income (Gwartney et al., 2018).
During the 1980s and 1990s, the United States was ranked as the world’s third freest economy, but since the 2000s, the ranking has constantly declined and was ranked sixteenth in 2016 (Gwartney et al., 2018). The reduction in economic freedoms will impact and restrict future growth. Political decision-making policies can have both positive and negative impacts on the economy. Policies can range from national budgets, strengthening the legal system, and protection of personal rights. A common policy that a government can implement to influence the economy is to adjust the cost of borrowing money by manipulating interest rates to promote investment (Investopedia, 2020).