Comparison of the economies of United
States and Australia
The
periods of the recent past has witnessed significant development of the global
economies and this has resulted in the enhancement of international
development. The development of the attributes of globalization has been of immense
benefits to the global nations because it has the consideration of enhancing
the attribute of regional integration. Regional integration has been of immense
benefit and it further resulted in the consideration of increasing the
performance of the economy because it encourages the aspect of international
trade. Over the period, the performance of various economies has been
identified to be influenced by the factors that are dominant in the economy and
this establishment has ensured that the global economies have different
attributes of developments (Horiguchi, 2012).
In reality, United States of America and Australia has emerged as some of the
big economies of the world because of the measures they have employed in their
economies. The choice of the economic structures and the institutional aspects
is also an aspect that has continued to enhance development of these economies
because the institutional aspects have the impact of ensuring that the
developmental polices are enacted and enhanced by the economic structures. The
World Bank has the role of ensuring that the economic performance of the global
economies are enhanced and as such has devised ideal measures of comparing the
performance of various economies. This aspect of comparison is crucial because
it forms the basis of resource allocation from the World Bank and other global
financial organizations generally known as the Brentwood institutions. The consideration
of economic performance is therefore crucial incentive for ascertaining the
influence of the economic structures and other attributes of economic
development.
Economy
of the United States
Over the period, the economy of the United States has been
identified as the largest national economy across the globe and this has been
enhanced because of the measures employed by the economy and that are
responsible for the attributes of development. The consideration of economic
performance can realized through the analysis of certain crucial aspects that
have been identified as the indicators of economic development. The usage of
these indicators is crucial because they help in the enhancement of economic
performance indication and also provides the basis for comparison with other
nations. Some of the leading aspect of measuring the performance of the economy
is the consideration of the interest rates, the gross domestic product (GDP)
and the national product. The prevailing unemployment rates and the rates of
inflation also provide crucial insights into the performance of the economy. In
the view of these realities, the performance and state of the economy of the
United States is shown the following attributes. GDP of $15.676 trillion with a
GDP growth rate of 2.3%, unemployment rate measured in January 2013 is 7.9%;
the inflation rates measured in 2012 was 1.7%
(Horiguchi, 2012). The economy of
the United States has been identified as the leading economy of the world and
as such the development in the currency has been established as the most stable
currency across the global nations and this aspect has enhanced adoption of
this currency as preferred global currency. In this regard, the adoption of the
American currency has resulted in significant changes into the aspects that
result in the fluctuating interest rates. The table below shows the various
fluctuation of the interests rates and exchange rates of the economy of the
united sates
Source (John Nieuwenhuysen, 2001).
Additionally,
the economy of the United States has established average interest rates of
6.81% and the government has enacted measures to ensure that the alteration of
this rates leads to the stabilization of the economic agents. Finally, the
consideration of balance of payment is another critical incentive of
ascertaining the performance of the economy because it has the consideration of
enhancing development and this consideration is influential for the aspects of
trade in the nation. Positive balance of payments shows that the economy exports
more than it imports and this incentive is ideal for economic performance (Mankiw, 2008). Based on this incentive,
analysis of the trade statistics from economy of the United States shows that
the economy has a trade deficit of $540.4 billion and this is broken down in
the following graph.
Source (Sullivan, 2012).
The Australian economy
Over
the period, significant analysis has been conducted on the performance of the
Australian economy and it has been identified that it is one of the richest in
the world and it is highly developed. According to the information collected
from the World Bank, Australian economy is one of the largest capitalist economies
in the world and this measurement has been conducted through the usage of the
ideal features for measuring the performance of the economy. The usage of GDP
is extremely crucial for ascertaining the performance of the global economies
because it forms an ideal comparison incentive for enhancing the analysis of
the global economies. Certainly, the development of the economy is extremely
beneficial because it has the capacity of enhancing the increase in the living standards
of the citizens. Analysis of the Australian economy has shown that it is
dominated by the service sector that comprises 68% of the gross domestic
product. Additionally, the mining sector has also taken significant attribute
of the economy and it comprises the aspects of 19% of the GDP (Peter J. Brain, 2012). In reality, the
revelations highlights are the attributes of development of the Australian
economy.
More
specifically, the indicators of economic performance have indicated the
following about the status and performance of the economy of Australia. The GDP
is calculated during the period of January 2013 totaled to $1.372 trillion with
a GDP growth of 3.3% in 2012. The inflation rate for the economy is g9iven as
1.6% while the unemployment rate is given as 5.4%. The economy of Australia
enjoys a positive trade deficit that has is beneficial for the aspects of
development and it is shown as 84.68%. This aspect is conducive for the performance
and enhancement of business in the economy. The economic planners of the
Australian economy have realized the importance of interest rates in the
economy as they have enhanced measures to ensure that the rates of interest
stagnates at 3% as shown in the following table.
Source (Peter J. Brain, 2012).
Variable analysis
The
development of the variables above is ideal because it provides n incentive for
comparing the performance of the two economies. The consideration of using the
GDP for example t analyze the performance of the two nations is crucial because
it shows that Australian economy is performed better then the American economy.
This depiction is supported by the consideration of the attributes stating that
the Australian economy continues to experience growth while the American
economy is on the decline. In this regard, the usage of the GDP aspect of the
economy reveals the disparities facing the American economy. Australia derives
growth from minerals awhile America’s growth is impaired because of the
involvement in war expenditure. Another incentive of comparing the performance
of the two economies is the attributes of trade deficit and this is ideal because
it provides the activities of the two nations in terms of trade. This
consideration is deal and it is influenced by the consideration of both
internal and international trade. In this category, Australian economy emerges
the best because it has the rate of 84.68% which is conducive for development.
On the other hand, the economies of the United States has experienced
significant decline from the previous period to land at $540 billion. This
depiction is indicative of the future development of the economies and it shows
that the economy of the United States has fluctuating trade deficit while
Australian economy has a stable trade deficit and this reflects the attributes
of development for the economies (Horiguchi,
2012). With regard to the issues of unemployment and inflation rates,
both nations have employed measures to ensure that the unemployment and
inflation rates are significantly controlled to manageable levels because they
are detrimental for the performance of the economy. High inflation rates are
not ideal for the development of the economy because the derail the activities
of trade in the economy. On the same note, high unemployment rates are also not
ideal for the establishment of economic performance because they result in the
consideration of adverse measures in the economy. This establishment is ideal
and the survey conducted across the two nation’s shows that they are almost
identical in the representation of inflation and unemployment rates.
Strengths and weaknesses of the
economies
Despite
the attributes of development that the Australian economy has received in the
recent past, the economy is faced with significant potential challenges because
the mineral resources are running out and this has the attribute of reducing
the economic performance because the GDP will be significantly reduced.
Ideally, this will also have the effect of reducing the attributes of
international trade because this forms one of the leading exchange products
with the external markets like those of China and India. On the other hand, the
American economy has continued to experience advanced challenges and reduction
in the GDP because f the involvement of the activities of war. These advents of
war have resulted in the significant decline in the attributes of foreign
exchange there by leading to the reduction in the foreign exchange figures. Finally,
both economies have significant strengths in the regulation to their
unemployment rates and inflation rates because these have formed the basis for development
of the nation’s economies. High inflation rates in the economy are very
detrimental and they lead to the aspect of disparities in the performance of
business. Inflation also has adverse effects on the level of savings (Sullivan, 2012). On the same note, high
unemployment rates are detrimental to the economy because it has the attribute of
lowering the performance of the economy. This is true because it lowers the GDP
by a significant margin. Therefore, these two economies have significant
strength in enhancing regulation of the both inflation and interest rates.
Conclusion
The
attribute f globalization has been extremely beneficial because it has enhanced
those aspects of economic development. With the realization of globalization,
the comparison of the performance of various economies has become an incentive
that is crucial for the trade partners and the World Bank has enabled provision
of files and data necessary for the attribute of comparison. According to he
information collected form economists around the globe, the performance of the
economies is illustrate through the use of GDP, unemployment rates, inflation
rates, trade deficit and the interest rates. In this regard, the comparison of
the performance of various economies is based on the consideration of the above
factors.
Base
don the above consideration, the comparison of the economies of United States
and Australia in enhanced through the conduction of the analysis of the above
indicators of economic performance. According to the above factors, the economy
of the United States is listed as the leading national economy across the globe
because it has higher GDP. Analysis of data received from the two economies
reveals that manageable aspect of inflation and unemployment rates. This aspect
is crucial because they have the attribute of increasing the performance of the
economies by a significant margin. In view of these developments, the economic
planners have ensured that the disparities facing the economies are eliminated
to ensure continued growth and development of the economies. The attribute of
mineral depletion and aspects of war have characterized as some of the
attributes responsible for the decrease in the performance of the economy and
the establishment of the corrective measures has ensured that these attributes
are regulated. Regulation of these adverse measures leads to the enhancement of
the development of the economies.
References
Horiguchi,
Y. (2012). The United States Economy: Performance and Issues. New York:
International Monetary Fund.
John
Nieuwenhuysen, P. L. (2001). Reshaping Australia's Economy: Growth with
Equity and
Sustainability. United States: Cambridge University Press.
Mankiw,
G. (2008). Principles of Macroeconomics, 5th ed. Mason, Ohio: ISBN-13:
978-0-324-
58999-3.
Peter
J. Brain, R. L. (2012). Population, Immigration, and the Australian Economy.
Australia:
Taylor & Francis.
Sullivan,
J. (2012). The World Economy. United States: Webster's Digital Services.
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