In The Sources of Economic Growth in Oecd Countries, doctoral candidate Melinda Blauert examines the interdependence of public health, educational services, product markets, trade, output gaps, financial conditions, innovation, and cultural diversification in the economically developing countries of the east and South. This research presents an in-depth analysis of the sources of economic growth in these countries. What driven economic development in the Oecd countries? What effects do economic changes, such as international terrorism and globalization, have on the drivers of economic development?…
A careful examination of the drivers of economic growth reveals differences among the countries. In the economically strong economies of Denmark and the Netherlands, public health and educational services are quite well-developed. Productivity growth is rapid and domestic output is competitive. Trade flows are balanced and sound. Government policy is pro-cyclical and investment in research and development is high.
In the less economically strong economies of Cyprus and Greece, public health and educational services are not well-developed. Productivity growth is slow and domestic output is competitive but slow. International trade flows are balanced but policy is pro-cyclical. Private sector growth is robust but not as robust as the public sector. International terrorism has had adverse effects on the drivers of growth, but governments have been effective in preventing damage to the economy through prevention and deterrence.
The analysis provides important insights into the drivers of economic growth by showing the sources of diversification between the countries. It is notable that only the United States, the only developed country with a fully open economy, accounts for over half of the increase in the Gini index during the past two decades. Growth is robust in the other remaining OECD countries (Ireland, Portugal, Italy, Spain and Greece) and the euro area as a whole. However, the United States accounts for more than half of the increase in the size of the world economy since the end of the Great Depression.
The analysis of the drivers of economic growth in the different countries provides a range of alternative views and suggests the ways in which changes in policy can be translated into real improvements in the structure of the economy. The main drivers of economic change appear to be personal consumption and investment, government consumption and non-government consumption, fixed assets, private sector activity and output gaps. These changes tend to be strongest in the United States, where they are pushed primarily through increases in consumer spending. They appear to be less influential in other OECD countries.
An important driver of the sources of economic growth in Oecd countries is the extent of trade liberalization. Most European countries have liberalized their markets to the point that nearly all consumers have access to some form of financial services. These include savings, credit cards and loans on goods and services. Within Europe, there are major divergences: in Germany and Italy, liberalization has been accompanied by protectionist measures, often applied to the financial sector. In the United Kingdom, by contrast, there is broad support for free trade.
A key driver of the sources of economic growth in Oecd countries is the extent of public sector employment. The public sector provides a major growth engine in most countries, especially in Europe . . . . . . where it accounts for around two-thirds of gross domestic product. In the United States, public sector employment has declined steadily over the past couple of years, but private sector employment is still robust. In Canada, the situation is somewhat different, with increased employment in the private sector offsetting declines in the public sector.
The sources of economic growth in Oecd countries are varied and dynamic. Many factors contribute to this. However, a key driver is the extent of free-market capitalism that prevails in the countries. This means that entrepreneurs are able to invest and expand, allowing for greater investment and production. A key aspect in this respect is the level of competition in the country. A country with a strong competitive system is likely to enjoy a faster and more efficient rate of economic growth than does one with a less competitive system.