Impact of Private Sector Debt on Australia’s Long Term Growth

“Private sector debt in Australia has crippled any prospect of long-term growth.” 

Don’t Fret over Debt 

Contents

I. Introduction

II. Australian Private Sector Debt Environment

Chart 1 Source: ABS (2015) Survey of Income and Housing 2013-14 and AMP.NATSEM (Dec 2015)

Chart 2 Source: Australia’s Debt: An Honest Debate

Chart 3 & 4 Source: RBA October 2018 Financial Stability Review

III. Household Sector’s Debt Sustainability

A. Household Debt to Income

Chart 5 Source: RBA April 2018 Financial Stability Review

B. Demand and Supply

Chart 6 Source: RBA October 2018 Financial Stability Review

C. Risks – Wage Growth and Unemployment

D. Distribution of Debt

Chart 7 Source: RBA Speech Household Debt, Housing Prices and Resilience

IV. Growth

A. Private Debt to GDP

Chart 8 Source: Trading Economics, OECD

B. Factors Affecting Growth

1. Monetary Policy and Interest Rates

2. Inflation

3. House Prices

V. The Role of RBA

VI. Conclusion

VII. References

The Australian economy has been unfazed by recession for 27 years now and still continues to hold the record for the longest stretch of economic growth in modern history. The country’s economic resilience has been the envy of many as they have breezed through the global financial crisis, Asian financial crisis, dotcom bubble and the great recession. Since 1992, Australia’s growth averaged at 3.2% per year which is well above that of other major developed economies. According to the ABS, majority of the growth for the past few years has been spurred by household expenditure. As with the trend of increased household consumption, concerns about an elevated level of private sector debt has also been looming. Is this worth a worry or is it just testing Australia’s economic resilience? This paper attempts to answer the question: Does private sector debt cripple any prospect of long-term growth?

A huge part of the Australian economy is financed through debt and it undoubtedly still continues to play an integral part of this country’s economic progress. Growth has been driven partly by debt as households and corporates utilize credit for capital intensive purchases or basically to generate more wealth.

Private sector debt are obligations undertaken by the private households and firms in an economy. This can take numerous forms such as mortgages, investor debt, personal loans, credit card, corporate bonds, overdraft and business loan.

Household debt is simply the total amount of money all adults in the household owe. Based on the data from ABS last 2014, Australia’s household debt composition is described in the chart below. Mortgages on owner-occupied houses (56.3%) captures more than half of the total household debt while investor related debt (36.5%) takes the second spot.

Chart 1 Source: ABS (2015) Survey of Income and Housing 2013-14 and AMP.NATSEM (Dec 2015)

The chart below lays down the division of private sector debt and focuses on the continuous increase of loans with the household sector eventually surpassing the loans provided to businesses.

Chart 2 Source: Australia’s Debt: An Honest Debate

After businesses tanked in the stock market collapse in 1987, Australian banks shifted their focus to pumping money into property by encouraging home loans.  In 2009, 60% of the portfolios of the banks in Australia consist of residential loans while the US and Canada carries 40% and the UK only has 15% (Stewart, Robertson, Heath, 2013). The substantial increase in the household’s sector leverage over the years has brought Australia’s level to be at par with most advanced economies. This was enabled by the decline in interest rates in an attempt to spur economic growth and inflation by making it very cheap for people to borrow and invest. Another factor that contributed to the sharp rise in Australia’s home loan sector includes easing in credit constraints in response to financial deregulation and increased competition among lenders (Kent, Ossolinski, Willard, 2007). As evidenced by the chart above, the share of total housing debt increased from 25% in 1990 to more than 60% in 2016 which came at the expense of productive business lending.

The decrease in business sector growth was a result of the strong increase in external funding already raised during the late 1980s. Businesses also had to reevaluate their gearing positions after the recession in the early 1990s (Stewart, Robertson, Heath, 2013).

Personal loans account for only a small share of total household debt. This comprises the borrowings made by households not related to residential or funding unincorporated businesses. It is also important to note that the ratio of non-performing personal loans has been in an upward trend throughout the years driven by credit card and other personal debt but this is not an indication of an overall deteriorating household health. According to the April 2018 Financial Stability Review by the RBA, this rise just reflects cyclical effects of economic conditions in mining-exposed states and structural changes in lending markets.

Find Out How UKEssays.com Can Help You!
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
View our services

On the funding side, Australian banks fund only three-fifths of their liabilities through deposits while around 35% is sourced through wholesale funding. Compared to its international counterparts, Australia uses offshore funding more. Low bank deposit levels do not imply a low share of household financial assets as the share of Australian superannuation assets invested in deposits is more than double the median asset allocation share for a number of OECD countries (Stewart, Robertson, Heath, 2013). A large share of household debt demand was serviced by the banking sector through offshore funding as most do not have direct access these markets. This allowed banks to diversify their sources but also gave them the additional task of hedging their foreign currency risk. Based on the data last 2013, around three-quarters of funds are hedged back into Australian dollars as a protection should the AUD depreciate. According to RBA’s October 2018 Financial Stability Review, Australian banks have completed their transition to a more resilient funding model by increasing their deposits funding while reducing their short-term wholesale debt. In addition to that, banks are also actively managing their future refinancing needs by extending the maturity of their debts. According to Chart 4, the weighted average residual maturity of their long-term debts was extended from 3 to 4 years.

Chart 3 & 4 Source: RBA October 2018 Financial Stability Review

A. Household Debt to Income

Since businesses’ debt profile have been decreasing, much of the focus is in households’ staggering debt increase. Relative to other developed countries, household debt in Australia is significantly high. Due to the low interest rate environment discussed earlier, people took advantage of the opportunity to take out larger and more flexible loans to buy the house they desired. As seen in Chart 5, the ratio of total household debt to income had a steep increase in the past decade alongside other countries such as Canada, Sweden, Norway and New Zealand. It is also worthy to note that the left hand side of the chart are the countries that were more resilient to the effects of the financial crisis while the right hand side were the countries that were more affected resulting to deleveraging and a lower ratio than the rest. Debt to income measures the percentage of income that is allotted to repayments and Australia’s household debt is around 1.9x the amount of its income. They own debts almost twice as much as they earn.

Chart 5 Source: RBA April 2018 Financial Stability Review

B. Demand and Supply

In Australia, a positive relationship between household income and demand for houses exists such that income elasticity of demand is likely to be one or greater (Berry, Dalton, 2004). According to Abelson, Joyeux, Milunovich and Chung (2005), the estimated long-run elasticity of real house prices to disposable income is 1.71. This means that if income increases by 1%, house prices will increase by 1.71%.

 Also, the more people borrowed money, the more real estate prices rose to meet the increased spending power of buyers. In addition, there is a constrain in the supply of well-located houses due to zoning issues, geography and inadequate transport therefore, pushing prices even higher as supply became scant (Lowe, 2017). Population growth as well as credit demand for speculative housing investors also caused prices to continue its upward trend.

 Looking at Chart 6, household liabilities have been driven largely by owner-occupied housing debt while investor housing remained almost unchanged from 2006 relative to disposable income. As discussed above, value of assets and liabilities rose throughout the years driven by the increase in real estate prices. The balance sheet portion of the chart also shows that for most households, value of the assets exceeds that of the liabilities; however, majority of their wealth such as the house and superannuation are considered as rather illiquid. 

Chart 6 Source: RBA October 2018 Financial Stability Review

C. Risks – Wage Growth and Unemployment

Growth in household debt has been outpacing income and asset growth since 2003 which is why the debt to income ratio in Australia has been creeping up. If wages fail to pick up and debt continues to grow, financial stress can arise on the back of households’ inability to service repayments with their income. Given the high debt burden, it is likely that households could trim down their spending should economic conditions suddenly go sour. A sharp contraction in household consumption can happen as they realize that they have already borrowed too much and try to get their balance sheets back into better shape. Therefore, a slowdown in income growth can directly impede the country’s growth making it more susceptible to shocks.

Another kind of financial stress that households may encounter is unemployment. The level of mortgage debt that was once manageable when it was first taken out might become unmanageable if the income earner suddenly loses his job. This translates to a sudden drop in income leading to failed repayments and essentially a decrease in consumption.

A person can liquidate the house if he fails to make repayments; however, this would entail a wider negative impact if it is brought about by a widespread difficulty to pay, rise in unemployment and households wanting to sell immediately. When panic is magnified, prices could immediately drop while the debt underpinned in those assets remain fixed. At present conditions, households in aggregate are still well-placed to service their debts (RBA 2018).

D. Distribution of Debt

The household debt to income ratio measures the capacity of an average Australian to repay its debt using its income. One important factor to consider in the analysis of this ratio is the distribution of debt. This focuses on who will likely get into trouble when things go bad which is not the average Australian.  Looking at Chart 7, the rise in the household debt to income ratio is most prominent in the 4th and 5th income quintiles. This is contrasted to what occurred in the United States where many of the borrowers were in the lower income bracket thus leading to the subprime mortgage crisis. In the case of Australia, the increased borrowings came from the wealthier citizens hence, they are more insulated to shocks and have more capacity to sustain their debts.

Chart 7 Source: RBA Speech Household Debt, Housing Prices and Resilience

A. Private Debt to GDP

Private debt to GDP ratio measures the capacity of the country to pay for the total household debt. Taking into consideration the worst possible case and that the private sector defaults on their repayments, how much of the debt can be covered by the government’s income? A higher ratio doesn’t necessarily mean that it’s bad. It is acceptable if the buyers of the debt are domestic which means they can spur economic activity; however, if growth slows down, the country might find it more difficult to repay their debts. In the case of Australia, the RBA has curbed demand for debts by implementing tighter borrowing standards in 2015. This has initially tempered the amount of debt and as expected, contracted the GDP. Recently, growth has picked up fueled by consumer spending financed not by debt but by shrinking household savings which indicates an increased consumer confidence in the government. 

Chart 8 Source: Trading Economics, OECD

B. Factors Affecting Growth

1. Monetary Policy and Interest Rates

The housing sector is very sensitive to changes in interest rates as compared to the economy as a whole but the degree varies through time and across countries (Berger-Thomson, Ellis, 2004). Essentially, a direct effect of monetary policy can be seen in the cost of housing. If short-term interest rate is raised, long-term rates will tend to follow suit sending mortgage rates and borrowing costs to increase as well. According to Case and Shiller (2003), a contractionary monetary policy dampens expected inflation which in turn increases the user cost of housing. Higher user costs will reduce demand thereby, causing a drop in prices and output. From the supply side, it will have an immediate effect on the construction cost, causing output to decline.   

Contractionary monetary policy shocks have significant negative effects on real GDP, residential investment and house prices in the US (Jarocinski, Smets, 2008). Applying the same shocks to the Australian housing sector, it was observed that changes in policy rates do not always reflect in the housing lending rates (Wadud, Bashar, Ahmed, 2012). Results of their study (Wadud, Bashar, Ahmed, 2012) also indicated that a contractionary monetary policy reduces housing output but does not really have a significant negative effect on house prices which had the same conclusion as Haug, Karagedikli and Ranchhold (2005).

With interest rates at the record lows and growth picking up quite well, the risk is when the RBA decides to hike rates. Households’ disposable income decreases as more of it is allocated to repayments. Financial stress can be felt from an increase in repayments more so in lower income households than from those who have higher disposable incomes. According to the RBA, arrears rates remain very low and over the past decade, households have already built prepayments in offset accounts and redraw facilities. 

2. Inflation

A contractionary monetary policy shock is found to help reduce inflation rate meanwhile a positive inflationary shock which is likened to an adverse supply shock can reduce the real economic activity such as building of new houses in the economy and thus, decreasing housing outputs (Wadud, Bashar, Ahmed, 2012). Their study revealed that the RBA’s inflation targeting strategy may actually indirectly boost the Australian housing market resulting to more outputs.

3. House Prices

House prices can impact aggregate demand and economic activity in several ways. Increases in property prices are more inclined to have a positive effect on real GDP in many countries (Zhu 2003).  First, it can lead to expectations of capital gains in property investments. When demand increases, builders start new construction creating employment and consumption. Second, private consumption also increases as home owners feel wealthier therefore, boosting demand for property related industries. In as much as price hikes can increase the wealth of existing homeowners, it also reduces the affordability of those who want to buy their own homes. They would have to take out a larger loan and commit to higher mortgage payments. Consumption then drops as a result. Affordability problems were generally observed in lower-income home purchasers. Richards (2008) argues that if housing is thought of as purely a consumption item then, a price hike would make the population in aggregate worse off. Increased housing prices and rents would shrink people’s spending power to consume all other services across all income structures.

If house prices in Australia are overvalued and price suddenly drops, the implications will be far worse than if the stock market collapses. Rahman (2010) presents three arguments as to why this is so. Firstly, a house is a large part of a household’s wealth compared to shares. If a person is suddenly less wealthy, consumption and the aggregate economic activity decreases and the risk of an economic recession increases. Secondly, borrowers may abruptly curtail their consumption when they are caught between falling house prices and rising rates. Lastly, households may end up having negative equity which means they owe more on their mortgage loan than the current market value of their homes. If mortgage defaults rise, lending capacity by banks for all purposes will tighten which can negatively affect the economy (Berry, Dalton, 2004).   

The RBA has been doing its job to keep the country’s high resilience reputation intact. Financial stability is still the core of its business as the housing market woes continue to raise concerns. The level of household debt does not appear to be a risk to them but rather, the implications to the economy once households trim their consumption as they feel their financial positions are less secure.

Over the past few years, the housing market has slowed partly reflecting the prudential measures undertaken by APRA and ASIC. Tighter lending standards and strong serviceability metrics were implemented by financial institutions. The changes affected the borrowers least able to afford a loan and in effect, fewer households will struggle to service their debt should they experience any shock. In a positive macroeconomic environment setting, prices already eased by a small amount relative to the large increase in the preceding years. RBA is concerned more about a rapid correction in prices for them to consider it disruptive for the financial system and household balance sheets. Moderation in demand and supply dynamics has weighed on prices recently. Capital controls in China and state taxes on foreign buyers curbed demand while new dwellings increased supply. Since 2015, APRA has also required banks to improve their calculation of “Net Income Surplus” (NIS) to ensure that households have adequate buffers in an event of a shock (RBA Financial Stability Review October 2018). This means that a borrower who has maxed out its loan would still have some spare income after expenses and loan repayments. Therefore, tighter lending standards has dampened demand overall but has actually improved the resilience of households. The policies implemented by APRA, ASIC and RBA have helped reduce financial instability and increase consumer confidence. 

Debt only becomes a problem when the risk of default is high and in the case of a mortgage, the asset becomes a forced sale. Looking at it in a wider scale, a ripple effect throughout the economy can happen. People and firms will lose confidence in the economy and the financial sector. House prices will tumble, jobs are lost and the economy experiences a downturn (NATSEM 2015). High levels of debt increase the sensitivity of future consumer spending to certain shocks (Lowe, 2017). In Australia’s case, most of the debt are in the wealthy sector which means they have high levels of disposable incomes. 

The RBA also plays a vital role in responding to this issue. It focused on strengthening the country’s resilience to future shocks which reinforced its stability. Banks are now soundly capitalized and are resilient to large price movements in properties. It has also slowed the pace of increase in household indebtedness by supporting the prudential measures undertaken by APRA and ASIC. Acknowledging that current households have debts that grow faster than its income makes the country less resilient to shocks.

With the arguments stated above, I personally believe that private sector debt in Australia will cripple any prospects of long-term growth if present conditions are altered. The arguments mostly dealt with the household debt in general but the same conditions apply to private firms as well. Conditions that decreases a person’s disposable income will constrict consumption and spending from consumers thus slowing growth. Factors that can hamper the growth of the Australian economy include a sharp increase in interest rates, stagnant or low wage growth, rise in unemployment, unpredictable inflation, sudden drop in house prices and a downturn in the economy.

In any case, just like how Australia was able to escape past crises, I am pretty confident that the government and the central bank had already anticipated, did stress tests and imposed measures to counter those factors even before it starts manifesting in the economy. They will not allow the private sector debt to reach a point that will impede long-term growth, so trust the system and don’t fret over debt.

ABELSON, P., JOYEUX, R., MILUNOVICH, G. and CHUNG, D. (2005). Explaining House Prices in Australia: 1970-2003*. Economic Record, 81(s1), pp.S96-S103.

Berger-Thomson, L., & Ellis, L. (2004). Housing construction cycles and interest rates. Reserve Bank of Australia Research Discussion Paper, No. 08.

Berry, M. and Dalton, T. (2004). Housing prices and policy dilemmas: a peculiarly Australian problem?. Urban Policy and Research, 22(1), pp.69-91.

Bullock, M. (2018). The Evolution of Household Sector Risks. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/speeches/2018/sp-ag-2018-09-10.html [Accessed 19 Nov. 2018].

Bullock, M. (2018). Household Indebtedness and Mortgage Stress. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/speeches/2018/sp-ag-2018-02-20.html [Accessed 19 Nov. 2018].

Case, K. and Shiller, R. (2018). Is There a Bubble in the Housing Market?. [online] Available at: https://www.researchgate.net/publication/4909875_Is_There_A_Bubble_in_the_Housing_Market [Accessed 22 Nov. 2018].

Haug, A., Karagedikli, Ö. and Ranchhod, S. (2005). Monetary policy transmission mechanisms and currency unions. Journal of Policy Modeling, 27(1), pp.55-74.

Kent, C., Ossolinski, C. and Willard, L. (2007). The Rise of Household Indebtedness. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/publications/confs/2007/kent-ossolinski-willard.html [Accessed 19 Nov. 2018].

Letts, S. (2018). People are spending their savings and it’s boosting the economy. [online] ABC News. Available at: https://www.abc.net.au/news/2018-09-05/gdp-june-quarter-2018/10202834 [Accessed 22 Nov. 2018].

Lowe, P. (2018). Household Debt, Housing Prices and Resilience. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/speeches/2017/sp-gov-2017-05-04.html [Accessed 19 Nov. 2018].

NATSEM (2015). Buy Now, Pay Later. Income and Wealth Report Issue 38. [online] NATSEM at the University of Canberra. Available at: https://www.natsem.canberra.edu.au/publications/search-by-type/?publication=ampnatsem-income-and-wealth-report-issue-38-buy-now-pay-later [Accessed 22 Nov. 2018].

Rahman, M. (2010). The Australian housing market – understanding the causes and effects of rising prices. Policy Studies, 31(5), pp.577-590.

Reserve Bank of Australia (2018). Financial Stability Review. October 2018. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/publications/fsr/2018/apr/overview.html [Accessed 19 Nov. 2018].

Richards, A., 2008. Some observations on the cost of housing in Australia. 2008 Economic and social outlook conference, 27 March. The Melbourne Institute, Melbourne

Smith, D. (2018). [online] Dicksmithfairgo.com.au. Available at: https://www.dicksmithfairgo.com.au/wp-content/uploads/2018/01/Debt-Paper-

Brochure_Screen-1.pdf [Accessed 19 Nov. 2018].

Stewart, C., Robertson, B. and Heath, A. (2013). Trends in the Funding and Lending Behaviour of Australian Banks. [online] Reserve Bank of Australia. Available at: https://www.rba.gov.au/publications/rdp/2013/pdf/rdp2013-15.pdf [Accessed 19 Nov. 2018].

Tang, E. (2018). 2017-18 GDP growth rate of 2.9 per cent confirms the resilience of our economy. [online] Austrade. Available at: https://www.austrade.gov.au/news/economic-analysis/2017-18-gdp-growth-rate-of-2-9-per-cent-confirms-the-resilience-of-our-economy [Accessed 19 Nov. 2018].

TradingEconomics. (2018). Australia Private Debt to GDP | 2018 | Data | Chart | Calendar | Forecast. [online] Available at: https://tradingeconomics.com/australia/private-debt-to-gdp [Accessed 22 Nov. 2018].

Wadud, I., Bashar, O. and Ahmed, H. (2012). Monetary policy and the housing market in Australia. Journal of Policy Modeling, 34(6), pp.849-863.

Zhu, H., 2003. The importance of property markets for monetary policy and financial stability. Conference paper, IMF-BIS conference on real estate indicators and financial stability, 27-28 October 2003, Washington, DC. International Monetary Fund (IMF).

Growth of LGBT Images in Popular Culture

Recent years have witnessed a proliferation of images of LGBT people in popular culture. Discuss this growth in visibility with reference to queer theory.
In recent years we have witnessed a proliferation of images of lesbian, gay, bisexual and transgendered people (LGBT) in popular culture. An indication of why this has occurred can be found in the historical context from which modern homo-viability arose. Furthermore I will look at how this increased homo-visibility has challenged heteronormativity thus producing social changes through collective social action and innovation, furthermore I will look at examples of LGBT images in television and film and gay representation. After mapping changes I consider the positive and negative implications associated with the increase in images of LGBT people in popular culture and the effects of modern homo-visual representations with reference to Queer Theory.
After mapping changes I consider whether Queer Theory offers an adequate account of changes or whether [other theories] give a more comprehensive analysis of why these developments occurred and whether they explain the positive and negative implications of the increase of visibility.
Societal attitudes towards same-sex relationships vary over time and place; according to constructionists the meanings of sexual acts are historically, culturally and contextually specific. This is demonstrated when observing historical social changes in sexual orientation. Constructionists hold that sexual orientation is fluid and dynamic, and that sexuality is constructed by social factors and influenced by social changes. In some ancient societies sexual orientation was not subjected to the binary constraints that are used to define categorize and segregate those of difference in more recent times, therefore sexuality was ambiguous. Historically we have witnessed the regulation of sexual orientation through formal societal controls enforced through law and judicial mechanisms, demonstrated historically by the sodomy laws prohibited homosexuality and made a capital offence in Britain in 1810. Even today homosexuality is illegal and punishable by death in some countries. This essay will look primarily at western societies and the historical context in which recognition of LGBT has become apparent.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

In modern western cultures, gay and lesbian people have been subjected to frequent prejudice and discrimination. This oppression often caused LGBT people to repress their true identities and sexual preference. 1973 was an important year for the LGBT community as the American Psychiatric Association removed from the Diagnostic and Statistical Manual of Mental Disorders their definition of homosexuality. As a result homosexuality was no longer classed as a clinical mental disorder – as something abnormal that needed medical treatment.
Homosexual acts were decriminalized in the Western world by the 1970s but it was not until the mid-1970s that the LGBT community became visible because of active protest to gain social recognition, which was vital for the minority to fight for their civil rights.
The Stonewall Riots in 1969 contributed to the increase in LGBT visibility. The Stonewall Riots were a series of violent conflicts between the LGBT community and New York City police officers. These riots lasted several days and were centered at the Stonewall Inn New York. These riots were widely recognized at the catalyst for the modern-day movement towards LGBT rights never before have the LGBT community acted collectively to forcibly resist police harassment.
The activist movements of the 1960’s and 70’s inspired events such as pride parades and dyke marches, it also caused large numbers of gay men and lesbians to protest against repression, police entrapment, and other forms of discrimination. Howvever this was transformed by the AIDS epidemic that struck the gay community so devastatingly in the 1980s. The AIDS epidemic affected both heterosexuals and homosexuals; however it was largely portrayed in media representations and pubic spheres as a homosexual disease and attempts were made by homophobes to restrict media representations of homosexuality, the only representations of the LGBT community were negative and reinforced this negative stigma.
Due to the homophobic past LGBT individuals were particularly vulnerable to the AIDS virus. Due to inadequate education LGBT individuals were not as aware of the precautions needed for safe sex in same-sex relations, and due to homo-invisibility only heterosexual safe-sex advice and education was available in schools. However, this horrific epidemic did provide the LGBT community with a public voice, increasing public visibility. Through collective action they struggled against this discrimination and organized campaigns to promote efforts in AIDS education, prevention, research, patient support, and community outreach. One important influential figure in AIDS activism through art is American pioneer Gran Fury. He formed a gay activist group called ACT UP (AIDS Coalition to Unleash Power) This group aimed to inform a broad public and provoke direct action to end the AIDS crisis. His works include, the street-spanning banner announcing that “All people with AIDS are innocent,”
The collective’s image of three interracial homosexual and heterosexual couples kissing above the caption “Kissing Doesn’t Kill: Greed and Indifference Do”
In addition to the work of Gran Fury, caused several other significant public projects to arise in response to the AIDS crisis including
SILENCE=DEATH Project and the Red Ribbon Project.
This collective effort transformed the AIDS epidemic from a syndrome that many were reluctant to speak about to a subject that could be raised sympathetically in popular news magazines and on television programs. Old stereotypes were seen to be inappropriate and, while much coverage of the epidemic was homophobic, some ignorance was dispelled and as a result, AIDS awareness has now spread into the mainstream, creating its own sphere of community-based organizations, charitable institutions, and even magazines for those who are HIV-positive.
During the 1980s and 1990s the LGBT community gained some legal protection and public recognition thorough collective action and protest. Laws decriminalizing homosexual behavior and prohibiting discrimination in employment, housing, and services were introduced. These were all positive achievements essential for the LGBT battle for equality and social acceptance; however, due to the increase in public visibility the LGBT community were affected by increased homophobia; LGBT individuals were victims of servere discrimination and hate crimes. Coming out still involved courage, indicating that negative implications of increased visibility persisted.
Historically LGBT have had to face many struggles in order to become visible but due to collective action of the LGBT community, however their struggles have had both positive and negative consequences, today the gay community are visible in public, political domains, this increased visibility has allowed the gay community to express their gay culture through gay prides, rainbow flags, LGBT events and gaining increased visibility in many areas of visual popular culture including, magazines film, music and television
The prevalence of LGBT representations in cinematic art and media representations prevailing in western culture has had positive contributions in challenging the dominance of heteronormativity through the increasing awareness of LGBT community. Lesbian, gay, bisexual and transgender individuals have been have been slowly gaining recognition by through collective action they have challenged and helped reconfigure notions of what had been compulsive normative homosexual representations. This challenge has changed people’s perception of categories of difference (masculinity and femininity) and (homosexuality and heterosexuality).
However not all gay representations are a positive, some media representation of LGBT individuals are distorted stereotypes. Typical media representation’s portrayals of gay men are sometimes negative, gay men are portrayed as ill from aids as demonstrated by the media representations of Freddy Mercury
Effeminate
These forms of stereotypes can cause negative implications for young gay men because they could see these representations as an ideal type. Lesbians are often portrayed in the media as butch man haters, or over feminized “lip-stick lesbians” these representations similarly to gay men are stereotypes and does typically not apply to all lesbians. Controversially lesbian visual representations are usually a fictional account distorted through a heteronormative lens of heterosexual males and capitalists self interest this is demonstrated in the picture below The power and dominance of heteronormative ideals has caused many past gay and lesbian film actors to feel the need to conceal their true sexual identity. Some feel they need to conform to heteronormative ideals in order to fulfil the fantasies of the heterosexual mainstream audience. Many gay actors wish to remain closeted, for example Rock Hudson Hudson said he would rather die before fans discovered he was gay he even misled magazines by posing with glamorous female stars. In 1985 that Hudson had AIDS, and a brief lover publicly outed him to the media. For most film stars open homosexuality, or even rumours of homosexuality, could end their careers. Therefore, it is not surprising that some gay and lesbian actors disguise their sexuality. However contemporary modern western societies we are slowly seeing changes in societal altitude, due to the fragmented nature of modern societal structure people no longer share common norms and values, this is due to the break down of social solidarity, this has caused people to fight the restrictive nature of heteronormativity.
The British actor Rupert Everett came out publicly in 1989. Rather than ruining his career his openness of his sexual identity seems only to have made him more interesting to audiences. After his success in My Best Friend’s Wedding (1997), in which, however, he played a gay character, he landed a very big role as the voice of the heterosexual character prince charming in the famous film series of Shrek.
Challenging this normative heterosexuality by broadening the range of identities and desires represented through the visual media has been a central concern in works created by independent lesbian/gay/ bisexual/transgender television and film makers, these films aim to centre and normalize homosexual identity. Many people see the success of Queer as Folk as evidence that TV shows can still be enormously popular and profitable due to the growing demand in the market for an un-distorted true representation of LGBT individual’s lives.
I have mapped out the historical context which has explained some of the social changes that have occurred that could have contributed to the proliferation of images of (LGBT) people in popular culture. I will now look at the views of Queer Theorists and their position and influence on the increase of LGBT images in popular culture.
Queer theory was developed a response to the AIDS crisis in the 1980’s, which promoted a renewal of radical activism. This theory contested against the increased homophobia brought about by public responses to AIDS. Queer theory became occupied in part with what effects – put into circulation around the AIDS epidemic – necessitated and nurtured new forms of political organization, education and theorizing in “queer”.
Queer theory developed out of unexamined constraints in the traditional identity politics of recognition and self-identity. Queer identity, unlike the other categories labeled lesbian or gay, has no interest in consolidating or stabilizing itself. It maintains its critique of identity-focus by understanding the formation of its own coalition; this may result in exclusionary effects in excess of those intended.
Queer theory challenges heteronormativity by providing recognition to a wide array of non-normative sexualities and sexual practices therefore not only applying to lesbian and gay men, but transsexual, bisexual, intersexual individuals. Queer theorists aim to challenge the cultural notions of “straight” ideology by the deconstruction the constraints of gender and sexual categorization, through challenging heteronormative ideals they wish to de-stigmatize those affected by segregation and repression.
Queer theorists hold that sexuality is fluid and therefore should not be restrained by categorization. The fragmentation characteristic of modern societies that has occurred has caused a decline in social solidarity therefore people do not share the same cultural norms, beliefs, or sexual orientation many people in modern societies have multiple identities therefore cannot be homogenized for the purpose of categorization. They focus on the individual subjective nature of gender and sexual identity and respect the meanings of these identities are only valid in that particular space and time. This perspective contrasts the essentialist’s theory, essentialists hold that gender and sexuality is an essential part of an individual’s biology which is determined at birth this notion is rejected by queer theorists.
Hollywood film productions pursues the “straight” theme as being the dominant theme to outline what masculine is. This is particularly noticeable in gangster films, action films and westerns, which never have “weak” (read: homosexual) men playing the heroes, with the recent exception of the film Brokeback Mountain. Queer theory looks at destabilizing and shifting the boundaries of these cultural constructions.
“Queer theory” was originally associated with radical gay politics of ACT UP, Outrage! and other groups which embraced “queer” as an identity label that pointed to a separatist, non-assimilationist politics.[5] Queer theory developed out of unexamined constraints in the traditional identity politics of recognition and self-identity. Queer identity, unlike the other categories labeled lesbian or gay, has no interest in consolidating or stabilizing itself. It maintains its critique of identity-focus by understanding the formation of its own coalition; this may result in exclusionary effects in excess of those intended.
Foucault theories contributed to the formulation of queer theory in his publication The History of Sexuality, he follows the social fluidity of gender and sexual orientation and the categorization of those of difference. He demonstrates how labels are created through different discourses and power relations therefore meanings reflect the social attitudes of that particular context E.g. Sodomy and homosexuality. According to Foucault he term homosexual was created through the discourses of medicine and especially psychiatry. But the consequences of this discourse transformed a previously socially accepted form of sexual expression to a sinful, mental condition. Foucault holds that prior to the invention of these labels of difference people were just people.
Queer culture in general is intertwining with the common “normative” culture, with people being exposed to the ideas of gay pride and becoming more educated about queer studies in schools and society.
Queer theorists focus on problems in classifying every individual as either male or female, even on a strictly biological basis. For example, the sex chromosomes (X and Y) may exist in atypical combinations (as in Klinefelter’s syndrome [XXY]). This complicates the use of genotype as a means to define exactly two distinct genders. Intersexed individuals may for many different biological reasons have ambiguous sexual characteristics
Conclusion
By the middle of the second decade of the twentieth century, the conception of homosexuality as a distinct identity category, with implications of mental and physical illness, homosexuality was no longer defined as a mental disorder
Although homosexuality would not be categorized as a distinct type of “deviant” personality until the beginning of the twentieth century, heterosexual values were effectively imposed throughout western society during the nineteenth century
In the new millennium, gay activism has increasingly become less galvanized by the specter of AIDS and has seemingly splintered into dozens of micro-movements–focusing on issues ranging from gays in the military to parenting, same-sex marriage, workplace fairness.
Yet others raise questions about the stigmatization of the gay body in those media that treat AIDS as a sign of the perversion of gay sexual practices and reinforce prejudices and stereotypes that contribute to homophobia.
Some represent the gay body in terms of its erotic and sensual power, while others, in the hope of raising awareness, inscribe it within the structure of their art as a positive model of affirmation and sexual liberation.
In contemporary visual representations, the gay body manifests itself through the presentation of iconographic codes and semantic referents constituted in the objectification of sociosexual and cultural actions of the gay community. Whether active or passive participants in this community, gay artists express themselves by proposing their sexuality as a locus for learning and communicating real experience, all the while critiquing media-promulgated stereotypes which they dispute, reject or adopt.
For more than two decades, precipitated by the feminist movement, the gay/lesbian liberation movement, and the AIDS crisis, discourses of gender, sexuality, and sexual identity have been central to visual representation.
As closet doors protecting “compulsory heterosexuality”(6) are opened – and the sight lines of those constrained within are expanded – our system of difference/s is seen at every level to bear traces of coerced subordination.
Bibliography
Halperin, David (1990) in Jagose, Annamarie (1996) Queer Theory. An Introduction. New York University Press. Original emphasis .
Foucault, Michel (1981) The History of Sexuality, vol. 1, An Introduction. Harmondsworth: Penguin.
Harry Benshoff and Sean Griffin, Queer Cinema: The Film Reader. New York and Oxford: Routledge. (2004): 6.
Thomas Waugh, The Fruit Machine: Twenty Years of Writings on Queer Cinema. Durham and London:
Duke University Press. (2000): 239. Paul Lee, “Director’s Notes,” CFMDC archives.
Jim Hubbard, “Introduction: A Short, Personal History of Lesbian and Gay Experimental Film.”
Millennium Film Journal On-line, 41 (2003). [Online]. Available: http://mfj-online.org/journalPages/MFJ41/hubbardpage.html
Benshoff, H. and Griffin, S. Queer Cinema: The Film Reader. New York and Oxford: Routledge, 2004.
Bruce, J. “Queer Cinema at the NFB: The ‘Strange Case’ of Forbidden Love.” In J. Leach and J. Sloniowski (Eds.). Candid Eyes: Essays on Canadian Documentaries. Toronto, Buffalo and London: University of Toronto Press. (2003): 164-180.
Goldie, Terry. (Ed.). In a Queer Country. Vancouver: Arsenal Pulp Press, 2001. Waugh, Thomas. The Fruit Machine: Twenty Years of Writings on Queer Cinema. Durham and London: Duke University Press, 2000.
Andersson, Yvonne (2001) Dokusåpor – en verklighet för sig? Granskningsnämndens rapportserie, Rapport nr 8.
Butler, Judith (1993) Bodies That Matter: On the Discursive Limits of ‘Sex’. New York: Routledge.
Carlshamre, Staffan (1987) Language and Time: An Attempt to Arrest the Thought of Jacques Derrida. Göteborg: Acta Universitatis.
Castells, Manuel (1996, 1998, 2000) Informationsåldern. Ekonomi, samhälle och Kultur. Band I – III. Göteborg: Daidalos.
Dyer, Richard (ed) (1977) Gays and Film, London: British Film Institute. 
Foucault, Michel (1981) The History of Sexuality, vol. 1, An Introduction. Harmondsworth: Penguin.
Giddens Anthony (1997) Modernitet och självidentitet. Självet och samhället i den senmoderna epoken. Göteborg: Daidalos.
Hall, Stuart (1990) Cultural Identity and Diaspora. In Woodward, Kathryn (ed) (1997) Identity and Difference,. London: Sage.
Hall, Stuart (ed) (1997) Representation. Cultural Representations and Signifying Practices. London: Sage.
Jagose, Annamarie (1996) Queer Theory. An Introduction. New York University Press.
Mc Chesney, R W (2001) All makt åt medierna. Eller ge folk vad folk vill ha? Stockholm: Bokförlaget DN.
Moore, Henrietta (1994) Divided we stand. Sex, Gender and Sexual Difference. In Woodward, Kathryn (ed) (1997) Identity and Difference. London: Sage.
Ortner, Sherry B (1974) Is Female to Male as Nature Is to Culture? In Ortner, Sherry B (1996) Making Gender. The Politics and Erotics of Culture. Boston: Beacon Press.
Robins, Kevin (1997) Global Times: what in the world is going on? In du Gay, P (ed) Production of Culture/Cultures of Production, London: Sage.
Rosaldo, M (1974) Women, Culture and Society; a theorethical overview. In Rosaldo, M and
Lamphere, L (eds) (1974) Women, Culture and Society. Stanford: Stanford University Press.
Woodward, Kathryn (ed) (1997) Identity and Difference. London: Sage
 

Economic Growth as an Indicator for Development

“Economic Growth is a necessary but not sufficient condition of Economic Development”. Comment on the limitations of economic growth and the importance of accounting for multiple dimensions of well-being beyond growth. You can use empirical findings or a case study to support your arguments.

 

Introduction

Economic growth is the percentage rate of increase in the monetary value of all the final Goods and Services produced in a period of time. Economists usually measure economic growth in terms of Gross Domestic Product (GDP) or Gross National Income(GNI)

 Economic development is the improvement in the well-being of the people of a nation in its economic, political and social spheres. The economic growth is an important condition in the economic development of a country. But the economic development is a much broader connotation than just the economic growth. The economic development of the people cannot be measured only by the increase in their income. The other measures of economic development include the social conditions like literacy rate, life expectancy and various other indicators which will influence the social and cultural well-being of a human being.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

In trying to explain the necessity but the insufficiency of economic growth on economic development, this essay will first discuss what economic development actually means and the different dimensions it entails. Then the essay will go on to talk about the importance of economic growth in the framework of economic development and yet why it falls short of being sufficient enough for economic development.

The last section will include a case study of India, which has shown remarkable economic growth post liberalisation and still lags behind in economic development indicators reinforcing the limitations of economic growth.

Economic Development over the years

The term ‘Development’ has its origins immediately after the second world war, when the United States initiated a massive reconstruction programme. From then on, the word has been researched and analysed and has over the years taken various different forms and meanings. In strictly economic terms, development has traditionally meant achieving sustained rates of growth of income per capita to enable a nation to expand its output at a rate faster than the growth rate of its population (Todaro.P 2010: 14). Till the 1970s it was believed that an increase in the gross national income(GNI) will trickle down to the masses in some form and help improve their social and economic indicators. But very soon it was realized that the even with the increase in the national income the social indicators of many underdeveloped countries remained stagnant. So the term economic development was redefined in terms of the reduction in poverty, inequality and unemployment within the context of the growing economy (Todaro.P 2010: 15) 

The decade before the turn of the millennium saw many new changes in the way economic development was being understood. The goals of economic development became much wider by including improvements in the income distribution, environment, health and education (Pheng L., Dang G.,2015) During this period Sen’s work brought about the broadest perspective of development goals (Pheng L., Dang G., 2015: 13) As Sen put it, “Economic growth cannot be sensibly treated as an end in itself. Development has to be more concerned with enhancing the lives we lead and the freedoms we enjoy.” (Todaro.P 2010: 16). This marked a complete shift in the way economic development was perceived and appraised. Income or wealth which were till then seen as ends in itself began to be seen as means to  achieving other purposes. The focus of economic development shifted towards the quality of life that individuals are able to achieve ( Dang. 2014: 461). The idea is that the quality of life cannot be determined or evaluated only by the resources an individual has but the ability of the individual to use the resource(capabilities), the reality of using the resource (functioning’s) and the psychic state of the individual in using the resources (Utilities) (Sen.A, 2000). The development economists started to focus on health and education after Sen’s capability approach since to convert the characteristics of commodities(resources) in to functionings, and to have the freedom of the choice of functionings, in most important cases, requires good health and education. (Todaro.P, 2010 : 18). Thus to broadly conceptualize economic development, it basically means improvement in the well-being of an entire society and its social systems (Todaro.P, 2010)

 Multiple dimensions of well-being

From the previous section it was clear that the wellbeing is inherently multidimensional (Decanq. A., Lugo M, 2013: 8). It should take in to account the objective condition of people and their subjective assessments of their lives. (Adler.A 2016). The objective dimension of the well being largely originates from Amartya Sen’s work where he talks about the capabilities individuals should have to live fulfilling lives. (Western M, Tomaszewski W 2016). Some core human capabilities include bodily health, bodily integrity, the ability to use the senses to think and to imagine, the ability to express emotions, to exercise practical reasons and autonomy with respect to one’s own life, to affiliate, to live with dignity etc (Nussbaum M 2003). The subjective dimension of wellbeing. Broadly the subjective dimension includes the freedom defined in terms of what an individual values doing and being. ( Sarah c, Mcgregor A,White C., 2018). The freedom to doing and being will be contingent on other components of well-being like education and in turn becomes a pre- condition for a few constituents of well-being like equity and fairness.( Millennium Ecosystem Assessment, 2005). There is also a relational dimension which should be considered, the social relationships of an individual, where the well-being of the individual is seen as a social or collective, going beyond the individual (ibid). Mankind’s activities have adversely affected the functioning of the earth that the wellbeing of an individual is also based on the quality of the ecosystem (Helne T, Hirvilammi T,2015). This adds an environmental dimension to the well-being conundrum.  If we are to achieve the development in our societies then it is necessary to reform our statistical data collection from being focussed on measuring progress in terms of production and consumption, to measuring in terms of human wellbeing ( Sarah c, Mcgregor A,White C., 2018) But it is very important to understand the various dimensions that influences the well-being of individuals before it can be operationalized into a single index of well-being. Many studies have been made to operationalize all these dimensions of well-being in to a single index. Indices like Human development index(HDI), Multidimensional poverty index(MPI) have been created to measure progress and well-being of a society. Studying the indices is beyond the scope of this essay.

Economic growth

 

Foremost, it is important to understand the term economic growth in it fullness. Economic growth is an increase in the capacity of an economy to produce goods and services, compared from one period of time to another (Investopedia 2005). Often, but not necessarily, aggregate gains in productivity correlate with increased average marginal productivity(ibid) So in simple terms, more the economy grows, more the income of the individuals (Income per capita) of the nation whose economy has grown. More income naturally leads to increased consumption, investment and savings.

Relationship between economic growth and economic development

The presumption for many years was that increased income(Economic growth) of a nation will lead to economic development. It was Richard Easterlin who first questioned the idea that GDP will lead to economic development. For the last few decades the debate on whether higher GDP will lead to greater social prosperity has existed. (Adler A, Seligman M, 2016:2) So what exactly is the relationship between economic growth and economic development? Before the start of industrialization, the average real life standards of the rich countries were no more than three times as great as the other poorer countries of the world (Todaro P, 2010: 78). But in the previous century the today’s developed countries have enjoyed far higher incomes than the developing (Poorer) countries. (Pritchett L, 2010: 4). The living standards of these developed countries have also increased many folds in the last century compared to the developing countries. I(ibid). Clearly there exists a strong relation between economic growth and human development. The economic growth provides the resources for human development and without these resources it will not be possible to achieve human development which is clear from the average real life standards of the rich countries today when compared to the poorer countries. (Ranis G, Stewart F, Ramirez A, 2000: 197).

A study done on 14 countries from the 1990s by the UK department of International development, the world bank, shows that poverty fell in the 11 out of the 14 countries which experienced economic growth and poverty grew in the other 3 countries where the economy showed negative growth ( World bank 2005). )  Reduction in poverty will surely aid in increase in Human developmentThe study of Gallup world poll data by (Deaton A, 2008) shows that “Each doubling of GDP is associated with a constant increase in life satisfaction” ( Easterlin A, 2013) . Thus it is clear the economic growth in GDP per capita is a very important and a necessary condition for economic development.

But the rankings done on the basis of HDI for 37 countries in 1993 did not match with the income rankings. (UNDP 1996 :5) Some countries like Colombia has achieved high human development though their income per capita is quiet modest, while countries like South Africa and Gabon having more than twice and thrice the per capita incomes of Colombia shows lower human development. (ibid). Social Progress Index (SPI) is one of the new measures developed to evaluate human development. The SPI takes in to account 53 social and environmental indicators under three headings : basic needs, the foundation of a well being and opportunity. (Economist 2016) When SPI is shown against the economic growth (GDP Per capita). The curve is not linear showing that the social progress slows down after a lever of GDP per capita is reached. Thus there is diminishing returns for GDP when a threshold is reached.

                Figure 1 : Source : Social progress indicative, The economist(June 2016)

The OECD( Operation for Economic Cooperation and Development, 2013) devised an index for the measurement of economic development called as the better life index. They chose 11 domains to be included in the index and ranked all the 11 domains individually as well as had a composite index based rank. Different ranks emerged when the domains are taken differently. If only life satisfaction is taken countries like Switzerland, Norway tops the list. But the wealthiest country is the United States. Australia which tops the list in the composite index does not even come in the top ten of the highest income generating countries and the US comes a distant 14th in life satisfaction and 6th when all the 11 domains are taken together. (Alder A, Seligman M, 2016).

Find Out How UKEssays.com Can Help You!
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
View our services

As the many studies clearly suggests GDP as the single measure of economic development raises many questions. There are many facets of economic development which cannot be quantified like the relational dimension, the environmental factors, the psychological factors etc (Adler A, Seligman M, 2016). Other issues like Justice, governance, equity and fairness which plays vitally important roles in the well-being of the humans could never improve with increase in GDP. Finally, economic growth is not an end in itself, while economic development or the well-being of the individual is a means to an end. Of course economic growth is necessary for economic development, as all indicators show that the richer countries have better well-being indices. But after a point there are far too many factors which influence the economic development of a country or the well-being of an individual to reduce it to an index as small as economic growth. Economic growth is not sufficient enough to represent economic development of a country.

Conclusion

 

Economic growth is a very important indicator in the development of a country. More the income, more the capital spent on welfare mechanisms and social structures. But income in itself is not an accurate measurement of the development story of a country. Income distribution is equally or sometimes more important. Thus GDP per capita is a better measurement of the economic growth than GDP in itself. But Increased GDP per capita is just a means to an end, higher economic development of a country or increased well-being of individuals. Thus Economic growth is a necessary but not a sufficient condition of economic development

Many countries have started using different indicators to measure the economic development of their countries. Bhutan is using Gross National Happiness (GNH) to design its policies. “France has recommended that the statistical offices of the world should  incorporate questions to capture people’s life evaluations, hedonic experiences, and priorities in their own terms” (Adler A, Seligman M, 2016 : 17). The United Kingdom has released their own Gross Domestic Well-being. The OECD had developed its own Better life index for its countries. a United Nations resolution encouraged Member States “to pursue the elaboration of additional measures that better capture the importance of the pursuit of happiness and wellbeing in development with a view to guiding their public policies” (UN General Assembly Resolution A/65/L.86).

In the broader context, these indices help the governments of the various countries and the international organizations to formulate policies which will improve the quality of life of the masses.

Bibliography

 

1.2 Economic growth and development [WWW Document], n.d. URL https://www.soas.ac.uk/cedep-demos/000_P516_EID_K3736-Demo/unit1/page_10.htm (accessed 10.30.18).

07e0c52e-39c2-4e09-a9ac-cc8ac99071c6.pdf, n.d.

328850Pro1poor1growth1in1the11990s.pdf, n.d.

40700982.pdf, n.d.

Adler, A., Seligman, M.E.P., 2016. Using wellbeing for public policy: Theory, measurement, and recommendations. International Journal of Wellbeing 6, 1–35. https://doi.org/10.5502/ijw.v6i1.429

Bank, T.W., 2005. Pro-Poor growth in the 1990s : Lessons and insights from 14 countries (No. 32885). The World Bank.

Barro, R.J., 1996. Determinants of Economic Growth: A Cross-Country Empirical Study (Working Paper No. 5698). National Bureau of Economic Research. https://doi.org/10.3386/w5698

Barro, R.J., 1991. Economic Growth in a Cross Section of Countries. Q J Econ 106, 407–443. https://doi.org/10.2307/2937943

Benjamin, D.J., Kimball, M.S., Heffetz, O., Szembrot, N., 2014. Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference. Am Econ Rev 104, 2698–2735. https://doi.org/10.1257/aer.104.9.2698

BLI2013-Country-Notes.pdf, n.d.

Coulthard, S., McGregor, J.A., White, C., 2018. Multiple dimensions of wellbeing in practice, in: Schreckenberg, K., Mace, G., Poudyal, M. (Eds.), Ecosystem Services and Poverty Alleviation. Routledge, pp. 243–256.

Coulthard, S., McGregor, J.A., White, C., n.d. Multiple dimensions of wellbeing in practice 14.

Dang, A.-T., 2014. Amartya Sen’s Capability Approach: A Framework for Well-Being Evaluation and Policy Analysis? Review of Social Economy 72, 460–484. https://doi.org/10.1080/00346764.2014.958903

Dang, G., Sui Pheng, L., 2015. Theories of Economic Development, in: Dang, G., Sui Pheng, L. (Eds.), Infrastructure Investments in Developing Economies: The Case of Vietnam. Springer Singapore, Singapore, pp. 11–26. https://doi.org/10.1007/978-981-287-248-7_2

Decancq, K., Lugo, M.A., 2013. Weights in Multidimensional Indices of Wellbeing: An Overview. Econometric Reviews 32, 7–34. https://doi.org/10.1080/07474938.2012.690641

Economic development, 2018. . Wikipedia.

Gross Domestic Product (GDP) vs Gross National Product (GNP) – Difference and Comparison | Diffen [WWW Document], n.d. URL https://www.diffen.com/difference/GDP_vs_GNP (accessed 10.31.18).

Gu, S., n.d. A World History of Economic Development: A Contribution to the Theory of Economics.

Haidt, J., 2006. The happiness hypothesis: Finding modern truth in ancient wisdom, The happiness hypothesis: Finding modern truth in ancient wisdom. Basic Books, New York, NY, US.

hdr_1996_en_complete_nostats.pdf, n.d.

Helne, T., Hirvilammi, T., 2015. Wellbeing and Sustainability: A Relational Approach. Sustainable Development 23, 167–175. https://doi.org/10.1002/sd.1581

Michael P. Todaro author, 2012. Economic development, Eleventh edition. ed. Addison-Wesley, Boston, Mass.

Mukherjee, S., Chakraborty, D., 2010. Is There any Relationship Between Economic Growth and Human Development? Evidence from Indian States. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.1624465

Nussbaum, M., 2003. Capabilities as Fundamental Entitlements: Sen and Social Justice. Feminist Economics 9, 33–59. https://doi.org/10.1080/1354570022000077926

(PDF) Coulthard, C.; McGregor, JA; White, C.S. Chapter 15: Multiple dimensions of wellbeing in practice. [WWW Document], n.d. . ResearchGate. URL https://www.researchgate.net/publication/325023179_Coulthard_C_McGregor_JA_White_CS_Chapter_15_Multiple_dimensions_of_wellbeing_in_practice (accessed 10.29.18).

(PDF) Millennium Ecosystem Assessment. Ecosystems and human well-being: synthesis [WWW Document], n.d. . ResearchGate. URL https://www.researchgate.net/publication/297563785_Millennium_Ecosystem_Assessment_Ecosystems_and_human_well-being_synthesis (accessed 10.29.18).

Preston, S.H., 1975. The Changing Relation between Mortality and Level of Economic Development. Population Studies 29, 231–248. https://doi.org/10.2307/2173509

Pritchett, L., 1997. Divergence, Big Time. The Journal of Economic Perspectives 11, 3–17.

Ranis, G., Stewart, F., Ramirez, A., 2000. Economic Growth and Human Development. World Development 28, 197–219. https://doi.org/10.1016/S0305-750X(99)00131-X

Robeyns, I., 2016. The Capability Approach, in: Zalta, E.N. (Ed.), The Stanford Encyclopedia of Philosophy. Metaphysics Research Lab, Stanford University.

Rontos, K., Salvati, L., 2013. Socioeconomic and Political Dimensions of Development Worldwide. Sociology and Criminology-Open Access 01. https://doi.org/10.4172/2375-4435.1000101

s-1.pdf, n.d.

Sen, A., n.d. Development as freedom.

Sen’s Capability Approach | Internet Encyclopedia of Philosophy [WWW Document], n.d. URL https://www.iep.utm.edu/sen-cap/ (accessed 10.28.18).

Simon Kuznets, 1966. Modern economic growth: rate, structure, and spread, Studies in comparative economics ; 7. Yale University Press, New Haven, Conn.

Spiegel, H.W., 1955. Theories of Economic Development: History and Classification. Journal of the History of Ideas 16, 518–539. https://doi.org/10.2307/2707508

Staff, I., 2005. Economic Growth [WWW Document]. Investopedia. URL https://www.investopedia.com/terms/e/economicgrowth.asp (accessed 10.30.18).

Stiglitz, J.E., 1986. The new development economics. World Development 14, 257–265. https://doi.org/10.1016/0305-750X(86)90057-4

Sugden, R., 1986. Review of Commodities and Capabilities. The Economic Journal 96, 820–822. https://doi.org/10.2307/2232999

Suri, T., Boozer, M.A., Ranis, G., Stewart, F., 2011. Paths to Success: The Relationship Between Human Development and Economic Growth. World Development 39, 506–522. https://doi.org/10.1016/j.worlddev.2010.08.020

The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom, 2006. . Psychology Today 39, 34–34.

Western, M., Tomaszewski, W., 2016. Subjective Wellbeing, Objective Wellbeing and Inequality in Australia. PLOS ONE 11, e0163345. https://doi.org/10.1371/journal.pone.0163345

White, S.C., 2015. Relational Wellbeing: a Theoretical and Operational Approach.

York, A.M., Feiock, R.C., Steinacker, A., 2013. Dimensions of Economic Development and Growth Management Policy Choices. State & Local Government Review 45, 86–97.

 

Intellectual Capital as the Engine for Economical Growth

INTELLECTUAL CAPITAL AS THE ENGINE FOR ECONOMICAL GROWTH:

The Role of Organisational & Relational Capitals

INTRODUCTION

Intellectual capital[*] is categorized as an intangible assist and is increasingly recognized by industrialized nations as having a major impact on economic growth and productivity. Tangible assets include both fixed assets, such as major, machinery, buildings and land, and variable assets, such as inventory.  Intangible assets are nonphysical asset, such as patents, trademarks, copyrights, brand recognition. Other types of intangible assets may include internet domain names, performance events, licensing agreements, service contracts, computer software, blueprints, manuscripts, joint ventures agreements, permits, confidential business information (CBI) and trade secrets. Brand equity is also considered as an intangible asset because the value of a brand, not a physical asset, would be determined by consumers’ perception of the brand and hence a brand’s equity contributes to the overall valuation of the company’s overall assets.

 

Tangible Assets also referred to as physical assets have traditionally been exclusively accounted for in the measurement of industrial performance and economic growth. However, intangible assets, referred to as intellectual assets, are also seeing their contributions grow considerably in the economic growth measurement criteria as stated by OECD in its 2010 report indicating that  “The ability to create, distribute and exploit knowledge has become a major source of competitive advantage, wealth creation and improvement in the quality of life”. The increasing importance of intangible assets over tangible assets is also emphasised and reported by S&P 500 market value and shown on Figure 1.  This is also emphasised in a study in 2005 by OECD Science “Technology & Industry Scoreboard” as shown on Figure 2.  Depending on the type of business, intangible assets, add to a company’s potential worth is increasingly becoming more valuable than its tangible assets.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

OECD countries and other emerging economies are increasingly basing their growth strategies on Intellectual Capital or knowledge-based considerations.  Together with these strategies in place, OECD countries all have well established policies and implementing measures whereas emerging and certainly developing countries have yet to establish dedicated business models and imbed into them Intellectual capital contribution for growth purposes .  It is well recognised among developed countries that production, dissemination, and valorization of intellectual capital are crucial factors for taking up the challenge of becoming technology developer. As a consumer of innovation and technology through the acquisition of tangible assets is certainly a non-sustainable strategy and modus-operandi to support job creation, competitiveness, and welfare. The transition from mostly transactional-based business model of most developing and developed nations to intellectual capital-based economies has demonstrated how national intellectual capital is a major driver for the economic growth and performance.

The role and impact of intellectual capital on economic growth has been assessed over the past decades through various measuring models.  A common understanding on the on types of measurements are based on the model namely the “taxonomy of three” covering (1) human capital, (2) organizational capital (3) relational capital both at company and country levels as elucidated by Andriessen and Stam, 2004, p. 10)1.  This “taxonomy of three” classification has also been used by international, regional organisations as a standard in ranking knowledge based economies.

Figure 1: Evolution of Intangible Assets versus Tangible Assets

Source: S&P 500 market value

 

In the “Taxonomy of three” classification, Human Capital is expressed as knowledge and competences of employees.  Relational Capital is measured as relations with external subjects (scope of external outreach) namely research centers, joint industry and research platforms, partners, clients and customers). As for Organizational Capital measurement, it is reflected and assessed on the scope of R&D efforts, technology portfolio, patents, innovations, intellectual property, information systems, databases etc. However, while developed countries are increasingly including the share in the financial return from a company or national, this is certainly not the case for most emerging economies and certainly not for developing countries. 

While major investments to build up a strong (1) Human Capital are being made globally through various measures and particularly higher education and technical skill capacity building, developing and largely emerging economies are still extracting their economic growth from investments made in tangible assets such as large capital projects in the oil and gas and related sectors.  This paper looks mainly at the contribution of (2) Relational Capital and (3) Organizational Capital on how, if in place, could enable and/or facilitate developing and emergingeconomies transition from consumers of technologies of “of the shelf commodities” or “production licenses” to producers of technologies through Intellectual property valorisation.

ORGANIZATIONAL CAPITAL

 Organizational Capital is reflected R&D efforts, technology development portfolio, patents awarded and their commercialisation, innovations, and related dissemination systems such as IT systems (relational databases and block-chains etc…). In particular, R&D investment and valorisation (commercialisation) is one of the most important factors fostering intellectual capital and creating wealth as a result of IP value generated in a synergic manner with all the above listed enablers that are essential contributing of Organizational Capital.   Indeed, Intellectual capital is increasingly becoming a major economic value driveras economies transition to become more knowledge-based or innovation-driven.  Research from Ocean Tomo2, a leading IPR Investment Banking firm, shows that the Intellectual Property contribution represents a significant portion of this intangible value.  Data from the US, Europe & Japan indicates that the more intellectual property a company holds, the higher its valuation.

Figure 2: Investment in Knowledge versus Investment in Machinery & Equipment

Figure 3 illustrates that an enabling value chain as pursued in developed economies should incorporate product development that should enabled by basic and applied R&D with commercialization of resulting Intellectual Property  for  the purposes of marketing.

It is a common understanding that a major contribution in the measure of a company’s technology and innovation portfolio and its impact on economic growth can be assessed through the strength of its Organisation Capital.  As an illustration for oil & gas and chemical companies of OECD economies, Total or Shell account for 6% of their total valuation and BASF for nearly 20% of its total valuation3.  However, intangible assets valuation for National Oil Companies (NOCs) in developing and/or emerging countries would be estimated to be much lower and hence more efforts are needed to enable and further catalyse the growth in the valuation of their technology and innovation portfolio.  

Figure 3:  Overall Supplier Value Chain

THE ROLE OF R&D IN ECONOMIC GROWTH

Research & Developments efforts within at company and/or government levels are the key drivers for the production of technologies and innovations, the latter being enablers for more productivity and economic growth. In addition to a vast literature scope coverage in this regard, it was also reported in a study by Begun Erdil Sahin from a sample of 15 OECD countries, including US4.

References to Studies in on the role and impact of research & development in the economic growth go have historical sources going back to the 17th and 18th century until recently all confirmed that Research and Development play a significant role in the economic growth of a country5. In economic terms, global investments levels in R&D are clear indicators on the impact of R&D on economic growth. Figure 4 provides an insight into R&D investments in the global world as percent of the country GDP highlighting that economic growth is highly dependent on the scope of expenditure5.

THE IMPACT OF IP COMMERCIALISATION ON ECONOMIC GROWTH

IP is certainly at the source of innovation and will only be meaningful if commercialized. While intensive research is being pursued to generate IP in the majority of economies, Europe and Japan for example have an increasing IP portfolio on research topics pertaining to climate change mitigation technologies as shown on figure 5.

The European Patent Office reports that approximately 60% of patents in the EU ‘PatVal’ survey 6 are used for commercial purposes.

A research conducted in the UK shows that investment in IP makes a major contribution to productivity excellence and innovation.  In the UK,   in 2014 132.6 billion pounds invested in IP (intangible assets) versus 121.3 billion pounds in tangible assets7. Figure 5shows Investments in Intangible Assests vs Tangibles Assets in the UK.

Figure 4: R&D Intensity of Selected Countries, 2000-2013. Source: World Bank Data

Figure 5: Global Climate Change Mitigation Technologies Number of patents

 

 

The Organization for Economic Cooperation and Development (OECD emphasises through its various studies and published work that Sustainable economic growth highly depends on putting in place the right policies and incentives to mobilise efforts for the development and commercialisation and use of technologies and innovations8,9,10,11,.

Academia, R&D Institutions and Industry all ascertained that IP is a key driving force for commercialization related initiatives and hence investments decisions for the purposes of product/process development as shown above on Figure 5.  In the process of booting the Organizational Capital, Policies and related implementing measures to include incentives by companies and/or governments will mobilise further for increased investments in R&D and hence enable economic growth. For illustration purposes, the importance of technology innovation within the European Union (EU) is underlined   in the Lisbon Agenda if EU was to position itself as the most competitive a knowledge-based economy in the World by 201011,12.

As reported by theGlobal Intellectual Property Center in 201813, Intellectual property generated owing to the valorization of R&D results is a strong reflection of innovation in the global economy and as key indicator; EU has seven (7) of top 10 nations with the strongest IP environment  as shown on Table 1.                      

Table 1:  Leading Innovative Countries

Countries

Innovation Ranking

US

1

UK

2

Sweden

3

France

4

Germany

5

Ireland

6

Netherlands

7

Japan

8

Singapore

9

Switzerland

10

 

With regard to the share of IP valorisation in the oil & gas and chemical sectors as a percentage of market value,  Table 2 shows the importance and share of Intellectual Assets valorization through commercialization/monetisation within two (2) of the oil majors (Shell and Total) in Europe and within the world leader in chemicals (BASF)14. It is clear from all these reported data and information that Intellectual Property drives economic growth and hence competitiveness. For further illustration,

Find Out How UKEssays.com Can Help You!
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
View our services

It is reported that in Europe 42 % of the total economic activity (GDP) in the EU is attributable to IP-intensive industries, worth as much as EUR 5.7 trillion.  More important is that Intellectual capital-intensive industries account for about 90 % of EU trade with the rest of the world, generating a trade surplus for the EU of EUR 96 billion15. Table 3 shows data reported by the World Bank16 on the contributions from royalties/licenses as income as a total percent of trade for some European leaders on technology & innovation. Figure provides data from OECD on the percent breakdown of the patents in accordance to their values in Million Euros.

Table 2: Share of IP valorization for major European OIL & Gas and Chemicals companies as % of the company market value

Table 3: Income from Royalty and License fees

Royalty and license fees received *(as % of total trade)

Royalty/license Income   (USD)Billions

Switzerland

7.15

19

Netherlands

5.31

21

US

5.13

120

Finland

3.55

2

Japan

3.53

30

In light of the above, it is very indicative that Organizational Capital leveraged through its main components namely R&D efforts and related IP valuation and commercialisation as the final product is a major element in the strategies of technology producers and innovators. This should also be the case for other than OECD economies to launch and sustain their transition from technology consumers (acquisition of technology licenses needed capital projects investment as well as related commodities) to producers of technology together with a real commercialisation strategy in place. Table 4 lists top technology licensing companies17and related licenses that are marketed to support project capital investments for the purposes of enabling economic growth.

It is clear that increasing   investments, while still at low levels, are being made for R&D activities based on fundamental and applied research working within the range of low Technology Readiness levels (TRL18 in economies other than in OECD economies, commercialization and marketing strategies are nevertheless nonexistent or very limited.  For commercialisation and market creation to generate subsequent to R&D and IP efforts, the requirement for addition TRL to a full commercial deployment (TRL 9) should be pursued.

Figure 6: The Distribution of Patent Value in OECD Countries

Source: OECD Science, technology and Industry Scoreboard (OECD 2005a)

Table 4: Top technology Licensing Companies-Oil& Gas /Petrochemicals

It is evident that innovation is the engine for growth and that increasing growth will only take place through increasing innovation, as is the case for OECD countries. An illustrative European example is the case of UK companies that by introducing product innovation experienced growth in employment and sales twice the rate experienced by non-innovators19. The UK ranks as the 5th innovator and among the innovation leaders (Germany, Sweden, Denmark, Finland & the Netherlands) according to WIPO’s Global Innovation Index201 .

RELATIONAL CAPITAL

As indicated above Relational capital is the third item in the “Taxonomy of Three” discussed above . While undertaking R&D in “solo” can be pursued for the purposes of developing a targeted competitive advantage, it is recognised that strong emphasis must be placed on the development of strategic partnerships for the joint development of technology with technology leaders from the academic and industrial world.

In the context of the Millennium Development Goals (MDGs), building on key partnership will boost access to public and private resources in the areas of research, technology, innovation, finance and human capacity for the benefit of advancing sustainable solutions to crosscutting industrial development issues such as climate change and biodiversity related challenges21.

Initiatives from the European Union to promote innovation among Europeans members is a good reference model for collaboration that has adopted a cluster policy across EU industrial sectors and to enable additional economic growth. The approach shows the emphasis on the role of clusters in facilitating cross-sectoral and cross-border collaboration, and in helping EU SMEs to grow and internationalise. There are about 2000 statistical clusters in Europe, of which 150 are considered excellent in terms of employment, size, focus and specialization. In light of this, and to leverage on the concentration of expertise in specific industrial sectors of relevance to developing and/or emerging economies, a strategic partnership adopting a country approach to identify partnerships and collaboration opportunities is to be sought before assessing in more detail capabilities and research programmes coordinated by specific entities.

In addition, particular focus will be placed on multilateral collaboration platforms, involving academia, research institutes and industry through the subscription to relevant joint industry and joint research collaboration platforms can be instrumental in this regard.

In the context of climate change and biodiversity, governments and companies are increasingly seeking to establish partnerships and/or collaborations with European leading R&D Institutes, universities and major oil & Gas & energy companies for the purposes of creating value from technology development with the different networks.

As a relevant highlight, some of the ongoing R&D efforts to address strategic initiates with global impact are those relate to climate change mitigation and adaptation technologies to safeguard against the impact of climate change. It is clear that the scope of relational capital to be put in place global economies should expand through collegial R&D efforts and partnerships. Now that it is accepted that climate change is a reality as a global threat, then strategic partnerships should be pursued to contain this threat. Figure 4 shows R&D efforts through patenting of mitigation technologies by some of the world leading economies22.  Other global challenges such as emissions management, water footprints, recycling and biodegradability of materials, biodiversity and related global potential initiatives should also fall under the preview of strategic partnerships to be put in place.

It is clear that a technology strategy powered by a strategic partnership/collaboration for the advancement of technology programmes and results thereof through commercialisation is essential at least for many challenges with a global impact on sustainability (emissions management, GHGs impact on climate change, Life cycle analysis  etc..)

Figure 6 provides for a common conceptual approach for the interaction and synergies between the Organization capital & the Relational to enable and promote sustainable economic growth.

Figure 6:  Valorisation from Organisational & Relational Capitals

 

 

 

CONCLUSION

As illustrative statements for the role of science and technology in economic growth, , Albert Einstein stated, “We shall require a substantially new manner of thinking if mankind is to survive, whereas Benjamin Franklin claims, “An investment in knowledge pays the best interest”.

 

REFERENCES

Andriessen, D. and Stam, C. (2004). The Intellectual Capital of the European Union / Measuring the Lisbon Agenda. Available at http://www.intellectualcapital.nl/artikelen/ICofEU 2004.pdf.

Research from Ocean Tomo.

Shell , total, BASF

4.  John Wu ·  https://www.innovationfiles.org/fueling-innovation-the-role-of-rd-in-economic-growth/; December 7, 2015

Jangraiz Khan; “The Role of Research and Development in Economic Growth: A Review”; Munich Personal RePEc Archive; 30. September 2015, at “https://mpra.ub.uni-muenchen.de/67303/”.

 EU Patval Survey (EPO); 2005, in “http://www.ipeg.com/wp-content/uploads/2015/02/PatVal-EU-study-2005.pdf”.

UK Intangible Investment & Growth (2016) and Intellectual property Rights Intensive Industries: Contribution to Economic Performance and Employment (2013)

The New Economy: Beyond the Hype. Final Report on the OECD Growth Project. Executive Summary. OECD. Paris 2005.

Available at: http://www.oecd.org/dataoecd/2/26/2380634.pdf (Last accessed 10th September 2005).

The Sources of Economic Growth in the OECD Countries. OECD. Paris 2003. Available at: http://www1.oecd.org/publications/ebook/1103011E.PDF (Last accessed 10th September 2005)

 Innovation Policies: Innovation in the Business Sector. OECD, Paris. 2005.

Professor Rifat Atun; Ian Harvey; Joff Wild, Tanaka Business School, Imperial College London in “Innovation, Patents and Economic Growth’ Discussion paper, 2006.

 Commission of the European Communities. Communication from the Commission: More Research for Europe. Towards 3% of GDP. Available at: http://europa.eu.int/eurlex/ en/com/cnc/2002/com2002_0499en01.pdf (Last accessed 10th September 2005).

 Global Intellectual Property Center in 2018

 SHELL. TOTAL, BASF

 https://euipo.europa.eu/ohimportal/en/web/observatory/ip-contribution.

 The World Bank – Promoting Intellectual Property Monetization in Developing Countries, 2015.

 Hydrocarbon Processing Handbook, 2014.

 KSA and others.

 http://www.wipo.int/publications/en/details.jsp?id=4193

 http://ec.europa.eu/growth/industry/innovation/facts-figures/scoreboards_en

The General Assembly and ECOSOC Joint Thematic Debate/Forum on Partnerships Trusteeship Council; Chamber, United Nations Headquarters; 9 and 10 April 2014.

EPO/UNEP Report

Factors for Economic Growth

Factors for Economic Growth 

Assessment 1

Table of Contents

Workshop Question 1

Reference

Appendix

Appendix 1

Appendix 2

Appendix 3

Appendix 4

Appendix 5

Appendix 6

Appendix 7

Appendix 8

Workshop Question 2

Reference

Appendix

Appendix 9

Appendix 10

Workshop Question 3

Reference

Gross Domestic Product (GDP) is defined as households by all consumption, businesses by all investment, and government purchases, plus foreigners purchases minus aboard purchases (Vox. 2018). GDP measures the total value good and services produced within the countries. this method is the most popular to measuring an economic output and is therefore to considering a measured size of an economy GDP is an important section to indicator growth rate of the economic performance for all nation. If GDP growing it a good sign are happening or is about to happen in number different areas – people will get more jobs or worker will getting better pay, for example, the company has felt more confidential enough to invests more worker into the company (Vox. 2018).

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

Economic well-being is influenced by the part of the Gross Domestic Product (GDP) – consumption, investment, government expenditure, and net export – leisure time, wealth and non-market activity (Bergheim, 2006). According to HDI trends, Australia’s HDI value for 2017 is 0.939 – which put the country in high position human development. Australia HDI between 1990 and 2017 show a figure HDI value from 0.866 in 1990 to 0.939 in 2017, which increases up to 8.4 percent (see appendix 1). During the period between 1990 and 2017 Australia, USA and Norway have an experience different degree of progressing toward to increasing their country HDIs. In 2017, Australia rank 3 in HDI 0.939 increase above an average 0.894 very high human development, while Canada ranks 12 and New Zealand rank 16 (see appendix 2).

Other issues due to inequality the loss in human development give the different of HDI and IHDI. As the inequality number increases in a country, a number of human developments also increasing. Even Australia’s HDI is 0.939. however, when the number decrease due to discounting for inequality has fall 0.861, which a loss of 8.2 percent due to the distribution of inequality dimension of HDI indices. Canada and New Zealand also shown a loss as well due to inequality of 8 percent to 7.7 percent respective. Due to inequality is very high and above average HDI by 10.7 percent and OECD is 11.9 percent. The Australia coefficient inequality is equal to 8.0 percent (see appendix 3).

There are 5 areas well affected to wellbeing such as; quality of human developing, life-course gender gap, women’s empowerment, environmental sustainability, and socioeconomic sustainability. (1) quality of human developing, which contain 3 sections such as; health, educational and standard living (see appendix 4), (2) Life-course gender gap –  ages group lifecycle perform (see appendix 5), (3) women’s empowerment – will look at health and family, violence against women and empowerment socioeconomic (see appendix 6), (4) environmental sustainability – this section will cover on environmental threat and sustainability, which will look at a risk across group and species in forest areas (see appendix 7), (5) socioeconomic sustainability – this will cover entire economic section how better or worse country performs (see appendix 8).

In conclusion, after going through all different issues section between Australia, Canada, and New Zealand. We can’t deny that GDP cannot necessarily be equated with human happiness. More GDP increase more good and services measure, which mean more jobs and more income. Most likely people have seemed place with high value. However, as mention GDP is used to measure the product of good and services, which made good and service can produce most of the part, because we as a consumer want them. Within holding back GDP would lead to third recognition of the conceptual and at risk. It is difficulted that inherent using a single number to summarise  an output for the entire country economy.

 

Appendix 1

(Source: Human Development Indices and Indicators: 2018)

(Source: Human Development Indices and Indicators: 2018)

Appendix 2

(Source: Human Development Indices and Indicators: 2018)

(Source: Human Development Indices and Indicators: 2018)

Appendix 3

(Source: Human Development Indices and Indicators: 2018)

Appendix 4

(Source: Human Development Indices and Indicators: 2018)

Appendix 5

(Source: Human Development Indices and Indicators: 2018)

Appendix 6

(Source: Human Development Indices and Indicators: 2018)

Appendix 7

(Source: Human Development Indices and Indicators: 2018)

Appendix 8

(Source: Human Development Indices and Indicators: 2018)

A Keynesian model has determination are the interest of macroeconomic theory, this included two private sectors such as household sector and business sector. The Keynesian model or private sector Keynesian model, has interacted capture between a consumption expenditure and autonomous investment expenditures, also is commonly use to illustrated working with a Keynesian economic, which including equilibrium, disequilibrium and the multiplier (AmosWEB Economics, 2018). The sectors we will look at is (private) sector of the Keynesian model. The private sectors should be more contrasting with the public sector or work more with government sectors to force allocated resource decision of economy through the system such as law, rules, and regulation. As the private sectors have dealt with business sectors contain a private, profit- seeker firmed into the economy, which combines resource scared through a product of want and need to satisfying consumer good and service. The business sectors are responsible for the investment expenditures on GDP (AmosWEB Economics, 2018).

Find Out How UKEssays.com Can Help You!
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
View our services

An implication has improving inventory control for economic stability. Because of continues and even greater important between inventory investment and business cycles. Their inventory control improves that leading to greater instability in production, for example, Saturn automobile their employment had a strike by stop shipments of the part, which arrive just on time, even just in time, it led to a risk. Even eliminate the stock inventories supplies materials, still, production has become more weakened and interrupted in supplies. We can conclude that good grow productions are the less stable rate, but still need more improvement (Economic stability in the 1990s). Thus, uneven of the sale behaviours as we founding that GDP will grow uneven more despites in lower sales-inventory ratio because an inventory will adjust rapidly due to the change of sales. In addition, and most importantly, change in investment inventory are more like to associated with sharper initial GDP declines. Since finding the speed of adjustment inventory increasing sharper recovery of GDP can be expected to accompany initial to surging of sales. Therefore, faster speed adjustment inventories sales will follow more closely than a sale from the past (Economic stability in the 1990s).

There two type of investment expenditure that can support this evidence of theory such as Induce Investment and Autonomous Investment as mention above.

First, we look at Induced Investment is an influence by income or output of economic. Induce Investment is a change which induces national income. Investment function signifies as rises real national income. In the diagram shown that the curve has a positive slope, which indicated that the level of national income has increased from OY1 to OY2,  the induction level investment also increased from OI1 to OI2 (see appendix 9). The shift investment curve as shown an increase in profit, but if firm expecting than it needs to induced to investment. The expectation depends on aggregate demand for good and service in economic. On the other side aggregate demand also depend on a national income as well. As mention above the higher level of national incomes, it leads to higher induced investment ().

Secondly, Autonomous Investment this will not change in national income because of it independent from national income. Regards to the autonomous investment size, many basic influences has increased in their populations. Manpower, technology and role of interest, is the expectation of economic growth in future and capacity role utilization. The diagram is shown autonomous investment curve in a horizontal line. For example, national income OY1 is an autonomous investment $10 trillion. When national income increasing to OY2 the autonomous investment will remain the same as $10 trillion (see appendix 10) ().

In conclusion, the private sectors drive a system. In contrast, investors in the Keynesian model income could determination decide if they need to invest. Plus, Induced Investment aggregate demand depends on national income and national income also depend on aggregate demand. Autonomous Investment as expected from economic growth.

Economic stability in the 1990s: The implications of improved inventory control. By: Bechter, Dan M., Stanley, Stephen, Business Economics, 0007666X, Jan1993, Vol. 28, Issue 1

AmosWEB is Economics: Encyclonomic WEB*pedia. 2018. AmosWEB is Economics: Encyclonomic WEB*pedia. [ONLINE] Available at http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=two-sector+Keynesian+model.

Concept of Investment – Investment Expenditures – Types of Investment – Induced Investment – Autonomous Investment – Definition – Explanation – Diagram – Economicsconcepts.com . 2018. Concept of Investment – Investment Expenditures – Types of Investment – Induced Investment – Autonomous Investment – Definition – Explanation – Diagram – Economicsconcepts.com . [ONLINE] Available at http://www.economicsconcepts.com/concept_of_investment.htm.

Appendix 9

Induced Investment

(Source: Economicsconcepts.com, 2018)

Appendix 10

Autonomous Investment

(Source: Economicsconcepts.com, 2018)

The Free Trade always considered as one of the major vehicles of an economic growth. Free Trade is international import and export which removing a barrier to trade with another country to increase economic integration, stronger trade facilitates and commercial ties (Department of Foreign Affairs and Trade. 2018). In my view, Free Trade can benefit all countries using the comparative advantage trade.

The reason that supporting free trade using the comparative advantage. because free trades are enabled to lowers pricing for consumers, increasing an export, which there will get a benefit from economy scale and greater choice of goods. By specialising in goods where other countries have lowered their opportunities cost, this can be increased in economic welfare. For example (Krugman, Paul and Wells, Robin, 2008), the USA is able to produce 2,000 textiles if it produces 0 fish or 1,000 tons of fish if it produces 0 textiles. Meanwhile, Vietnam can produce 1,000 textiles if it produces 0 fish or 2,000 tons of fish if it produces 0 textiles. It is concluded that the USA has the more comparative advantage of textiles and Vietnam has the more comparative advantage of fish; therefore, USA can produce more textile and consume fish from Vietnam, while Vietnam can produce fish more and consume textiles from the USA (Economics Help. 2018).

This can be seen that Free Trade has benefits to all their trading partners by increase a global output and economic growths. The whole world gaining from both sides of the trade and trading partnership at least with some trade or no trade. By using comparative advantage trade has brought the highest welfare possible in other participants countries by facilitating product in specialisation across other national boundaries. Thus, an outcome in term of Free Trade regimen with a promotion of reciprocally of labour profitable division, which greatly improved for their real potential of national product across the nation. Ultimately, therefore, with a Free Trade reciprocally has valence result in higher living standards and a worldwide reduction of poorness.

In conclusion, Free Trade has brought an increase in demand for labours as Free Trade allowed a country to import goods intensive-skill and export more intensive- goods of labour. This will increase a labour for demand and reduction of poorness.

Economic and Trade Growth of Indonesia

Introduction-

Indonesia is an emerging economy that has the 4th largest population and the sixteenth largest economy which is the largest in the South-East Asian region. It has strong growth but is stained by its history of poor governance of economic policies surrounding development and growth of the economy. This poor governance has caused the economy to be volatile and lose investor confidence.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

Indonesia has a optimistic goal of joining the ranks of the top 10 world’s economies and being classified as a ‘developed economy’. Indonesia will not make this goal if it continues to operate in the way it does, but if Indonesia is governed very well with sound economic policy surrounding their downfalls it should be able to take advantage of its growing region, large domestic market and large low pay workforce to reach its goal.

Economic Growth-

Previously Indonesia was considered a developing economy but now with it’s recent industrialisation and integration into the world economy complemented by its strong growth and prospects is now considered an emerging economy.  Since 1980 Indonesia has growth at an average rate of over 5%, although it is not as quick as some of it’s East Asian neighbours it still places Indonesia well above most of the Economies in the world. In 2011 the government of Indonesia set goals of becoming one of the world’s 10 largest economies by 2025, to achieve this Indonesia would have to rise its annual growth by 2%. If this is achieved Indonesia would be among the world’s greatest emerging economies known as the BRIC economies.

International and regional business cycle has had extreme impacts on the Indonesian economy. For example, during the rise of global oil prices most economies experienced downturn, but Indonesia had an acceleration of growth due to its major oil exporting industry. This was upturned in the 1980’s with the oil prices pushed down by over supply and with them the growth rates of the Indonesia’s economy. The greatest impact of the International business cycle in Indonesia was shown in the 1997 Asian Financial Crisis which saw the in Indonesian economy contract by 13% in one year.

Due to the affects of globalisation Indonesia’s inflation rate has been very volatile because increases in fuel prices(2005,2013) and increases in food prices(2008). Inflation rates are expected to remain stable in the foreseeable future due to stagnant growth reducing demand pressures.

GDP of 1.016 trillion USD

GDP per capita 3,846.86 USD

GDP graph

Source: World Bank

Income distribution

– Globalisation has boosted economic growth and income per capita. This has led to millions of people being brought out of poverty and a higher amount of disposable income with a wealthier middle class which can boost domestic markets due to higher domestic demand. However since globalisation income distribution has been becoming more unequal, this can be seen by the shift of the Gini coefficient from 0.3 in 1990 to 0.4 in 2016. This rapid shift to inequality is due to a range of reasons, some of which is due to entrepreneur’s being able to take advantage of new markets, and new technologies in today’s globalised economy.

-Rich getting richer: As Indonesia integrated into the world Economy it’s businesses gained access to massive markets, this allowed for Indonesia’s best entrepreneurs to make billions which benefited everyone through economic growth, investment in domestic manufacturing and domestic employment but the income from employment was nothing in comparison to the billions given to entrepreneur’s. And after the creation of these corporations as the world’s population grew and the world reduced it’s trade restrictions these tycoons gained immense wealth further creating the divide between wealth. A recent report found that 1% of Indonesia’s population owned 49.3% of the country’s wealth.

-New skills demanded: As the world has become more dynamic and globalised it has become more reliant on new technologies to access remote markets, conduct research and create efficient and cost effective products. This leads to a structural change in the demand of the type labour to higher skill. Due to the rich having better access to education they are more likely to be able to work in these high skill, high demand jobs they will usually gain more pay and work than lower income families. This leads to further income disparity. This is shown in Indonesia’s structural change from agricultural employment to services in the globalisation period.

 

 

Quality of life

-GNI per capita is US$10,355, it is still behind 115 other countries in terms of living standards.

 

 

-The World Bank classifies Indonesia as a lower-middle-income country, suffers from a relatively high incidence of poverty, low economic development and Poor performance of other key indicators.

As Indonesia became more integrated into the world economy their quality of life has been significantly impacted, these impacts can be displayed by analysing the relationship of key indicators of quality of life with the growth of their economy as the economy became more globalised.

This first example shows the positive impacts of integration on quality of life as you can see through the relationship of the economies GDP growth and the growth of Indonesia’s HDI. Between 1990 and now the Economy has become more globalised growing its economy and consequently so does its HDI.

Indonesia’s GDP Source: World bank

                                                                                                                             Indonesia’s HDI Source: UNDP

My second example shows the negative impacts of becoming more globally integrated. Recently the overall unemployment rate has been improving(5%), however integration into the world economy has seen high volatility in unemployment due to their volatile globalised economy this is shown in the spike of unemployment following the massive 13% contraction of the Indonesia’s economy due to the Asian Financial Crisis.

Unemployment Indonesia

Indonesian GDP

 

 

Source: World Bank

 

Trade

The Indonesian Economy is less integrated into international trade than the average East Asian economies, therefore trade is less important for their economy. This means that Indonesia has fewer cyclical impacts through trade linkages. However, Indonesia is most closely integrated at a regional level, which is why the AFC had such a large impact on the Indonesian Economy.

Indonesia’s trade (% of GDP)

Trade in goods and services-

Liberalisation of trade has allowed Indonesia to access global markets which has led to stronger economic growth. Exports have grown substantially since the beginning of Indonesia’s global economic integration in 1985 peaking around 50% before the GFC, which had now significantly dropped recently due to protectionist measures, appreciation of Indonesian currency and poor commodity export performance. Another reason for weak trade performance is due to limited finance access, poor infrastructure, complex regulations and increased trade barriers, Indonesia’s manufacturing sector is not competitive in comparison to similar economies.

Trade Agreements-

As Indonesia has become more integrated with the world economy, they have participated in global, regional and bilateral trade agreements. This has allowed Indonesia to increase economic growth through mutual benefit agreements. One such agreement is the Association of South-East Asian Nations (ASEAN). This agreement which includes 10-member nations uses a Common Effective Preferential Tariff scheme which reduces tariffs between ASEAN nations by 5%. This was made in an attempt to make a single market of 600 million people with free flowing goods, capital and labour. This agreement shows how globalisation, through trade agreements, has allowed Indonesia to expand its’ market access immensely.

Structural Change-

To integrate into the global economy Indonesia had to remove trade barriers to allow for foreign trade and investment. This meant that the highly protected Indonesia in the 1980’s underwent massive change. Between 1987 and 1995 manufacturing tariffs were reduced from 86% to 24% and agricultural tariffs were reduced from 24% to 12%. The country continued to pursue trade liberalisation which has allowed it to thrive in an increasingly globalised economy. However due to this pursuit of global trade integration Indonesia’s agriculture sectors have fallen in importance due to their inability to compete well in a global economy. This has led to a structural change of Indonesia’s economy (as well as new technologies) away from agriculture to towards manufacturing and services.

Investment

A lacking domestic private investment in Indonesia means that Indonesia’s gains substantial benefits from integration into the global economy through foreign direct investment (FDI). FDI had been increasing and was USD32Bn in 2017, but this year have dropped significantly forecasted at USD12bn this year. These inflows are significantly lower than similar economies which is due to inconsistent and poor government policy.

During the AFC Indonesia’s central bank was unable to stabilise their currency, resulting in Indonesia letting it float freely, this caused the rupiah to suffer massive depreciation causing massive disturbance in financial markets and the economy.

Environmental Sustainability

The industrialisation and globalisation of the Indonesian economy has had an adverse effect on the environment. In the past decade and a half Indonesian forests fell by 15% due to logging and land clearing, water and air pollution has increased significantly. This is in part due to the massive increase of demand for natural resources such as coal or wood to continue servicing and supplying the world market. As you can see in this graph at the beginning of Indonesia’s integration into the world economy their Co2 emissions have increased as their economy gained the demand for natural recourses due to the increased stress on production industries.

Indonesia Co2 emissions per capita

Source: World Bank

Due to Indonesia being a cluster of islands coastal inundation and extreme weather events which are side affects of climate change will significantly affect them. So as the world continues to globalise and industrialise the world will produce more emissions. Thus if more environmentally changes are not made Indonesia will have to face terrible impacts from climate change.

Strategies for economic growth/development

Indonesian economic policy has been evolving since the beginning of globalisation in the 80’s Recently they have been attempting to, according to Indonesia’s 2017 growth strategy ‘promote growth and enhance people’s welfare supported by sustainable growth, resilient economic sector, inclusive economic development, and macroeconomic and financial stability. The Government remains committed to continuing structural reforms and accelerating infrastructure development to achieve these objectives’

-response to globalisation policies:

To create economic growth Indonesia’s government orientated their investment from import substitution to export manufacturing in the 1980’s. This has allowed Indonesia to increase its access to the globalising world hence increase access to investment and trade.

During this time Indonesia had also commenced a series of trade deregulations to increase competitiveness of their domestic producers against their global competitors.

Another focus by the Indonesian government in recent decades is the liberalisation of financial markets, beginning by shifting from a fixed exchange rate to a managed in 1978. The rupiah(Indonesia’s currency) was devalued in the 1980s to improve the competitiveness of domestic producers. This managed float backfired in the AFC due to the inability to control the currency during the crisis. This led to a massive depreciation causing extensive disturbance to financial markets and the economy.

-Recent growth policies:

Former President Yudhoyono presented a 15-year plan in 2011 that was designed to boost economic growth from an average of 6% to 8%, through the investment into infrastructure and education. This plan concentrated on developing economic corridors and development of export markets.

Later with the election of President Joko Widodo in 2014 the plan’s priorities shifted. Widodo government has mostly made minor changes to make businesses easier to run. Due to this Indonesia is struggling to maintain growth of 5% much less than Yudhoyono’s plan of 8%.

-Economic Development:

In order to further integrate with the global economy and have a say in global matters Indonesia has joined the UN. Due to joining the UN Indonesia along with all UN members had agreed on a plan to work together to meet the needs of the world’s poorest which was named 8 Millennium Development Goals (MDGs).

Source:UNDP

Indonesia failed to meet the MDGs target by 2015 but made serious advances in most areas The Indonesian government is still planning on completing these goals and is building on the progress of MDG’s.

Examples of Development policies:

-Environmental sustainability

Indonesia pledged to reduce emission by 29% by 2030 but is track to reduce emissions by just 19%. This average attempt at emissions reduction is due to a dependence on fossil fuels and deforestation. Indonesia is attempting to reduce emissions through the increase the supply of renewable energy through geothermal and hydropower. USD200m was used to fund geothermal generators.

-Education

Existing education policies are poor at best. The Indonesian government widened its Program Indonesia Pintar (PIP) policy which provided subsidies for poor children. But PIP fails to account for the increase in cost’s for secondary education, causing high dropout rates.

-Recent Anti-Globalisation:

Recently policies seem to be opposing integration with the global economy, through restrictions on investments and local content rules. These policies are created to boost domestic development but will weaken their economy overall and lower foreign investment confidence.

Conclusion

Indonesia is a showcase for taking advantage of Global and regional integration through trade, finance and investment liberalisation delivering massive economic growth and development. However, it is also a showcase for the extensive damage an economy can receive if their economic policies are not properly assembled.

In conclusion Indonesia has achieved strong growth but is faced with various challenges that it must plan for through well prepared financial and government institutions to create policies to boost the economy through Indonesia’s downfall’s such as infrastructure and education. This will create stronger economic growth and stability maintaining investor confidence and maintaining the recourses to help with economic development such as poverty and environmental sustainability. Whether Indonesia can make strides in these areas will decide on whether it can succeed in joining the worlds 10 leading economies by 2025

BIBLIOGRAPHY

All the information I gained came from these resources:

Reasons Behind The Growth Of Eurocurrency Markets Finance Essay

The Eurocurrency market сonsists of banks, which сalled Euro banks that aссept deÑ€osits and make loans in foreign currencies. Eurocurrency is a deÑ€osit held in the bank outside the сountry in whose currency the deÑ€osit is dominated. The deÑ€osit can be Ñ€laced in a foreign bank or in the foreign branch of a domestiс US bank. For еxample, dollars deÑ€osited in a bank in Switzerland arе Eurodollars, yen deÑ€osited at a US bank are Euro yen, etc. The Eurocurrency market is dominated by US dollar or the Eurodollar. The deposit need to be held at a European bank or in Europe. Eurocurrency is used for lending and borrowing. The Eurocurrency market often provides a cheap and convenient form of liquidity for the financing of international trade and investment. The main borrowers and lenders are the commercial banks, large companies, and the central banks. By raising funds in Eurocurrencies it is possible to secure more favorable terms and rates of interest, and sometimes to avoid domestic regulations and taxation. The deposits and loans were initially on a short-term basis but increasing use is being made of medium-term loans, particularly through the raising of Eurobonds. This has to some extent replaced the syndicated loan market, in which banks lent money as a group in order to share the risk. The Eurocurrency market is dominated by US dollar or the Eurodollar. Occasionally, during the 1970s and 1980s, which were a weak dollar period, the Euro Swiss Franc and the Euro Deutsche Mark markets increased in importance. The Eurodollar market originated post Second World War in France and England thanks to the fear of Soviet Bloc countries that dollar deposits held in the US may be attached by US citizens with claims against communist governments. A Eurocurrency is a freely convertible currency deposited in a bank located in a country which is not the native country of the currency. Restrictions on convertibility take many forms – limiting the amount that can be exchanged, the currencies into which exchange is possible, the uses for which foreign exchange can be obtained, or the range of holders who are allowed foreign exchange.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

The Eurocurrency market has grown rapidly mainly due to the existence of various US regulations that have raised costs and lowered returns on domestic banking transactions. In other words, the Eurocurrency market has become popular because of the absence of restrictions from the government which have led to attractive deposit rates for savers and attractive loan rates for borrowers. This means that banks can offer higher interest rates on Eurocurrency deposits than on deposits made in the home currency. Similarly, banks can also charge lower interest rates to Eurocurrency borrowers than to those who borrow the home currency. The spread between the Eurocurrency deposit and lending rates is less than the spread between the domestic deposit and lending rates giving Eurocurrency banks a competitive edge over domestic banks.
The Eurocurrency market began to develop in the 1950s, when the Eastern Bloc countries were afraid the United States might seize their holdings of dollars. It means that instead of depositing their dollars in the United States, they deposited them in Europe. Additional dollar deposits came from Western European central banks and companies that exported to the United States. The other long-running disadvantage was a “Regulation Q”. This prohibited the payment of interest on demand deposits, as well as authorising the Federal Reserve to set a maximum interest rate payable on savings and time deposits in US banks. The level of interest rates in the money supply was raised through slowing down the growth of the money supply. However, while money market interest rates rose, the interest rates payable on time deposits, were held down by the ceiling. Investors moved their time deposits from the banking system, causing the banks to experience a shortage of funds. The banks then looked to the Eurodollar market for funds, and in 1966, when money was tight, borrowing from European Branches of US banks by their head offices rose by $2.5 billion. Nevertheless, banks began to regard the market as a substitute source of dollars even when “Regulation Q” was not effective as in 1967. Funds raised through this method were then used to continue lending to customers in the US. “Regulation Q” stimulated the growth of the Eurodollar market in two ways: firstly, it reinforced the market`s ability to offer higher interest rates on deposits. Two other reasons why they could offer higher interest rates were that Euro banks operated on lower margins; and the effect of domestic reserve requirements. Secondly, the growth of the market was stimulated because of the demand for dollars from commercial banks in the US in order to go around domestic credit restraint policies.
In 1957, the market surged again after changes in British laws. In the 1960s, the market grew once again when, after changes in US regulations discouraged US banks from lending to non-US residents, would be borrowers of dollars outside the United States turned to the Euromarkets a source of dollars. The next big increase in the Eurocurrency market came after the 1973-74 and 1979-80 oil price increases. OPEC (Organisation of the Petroleum Exporting Countries) members avoided potential confiscation of their dollars by depositing them in banks in London. The dramatic growth of flight capital to Swiss and other banks, encouraged by the development of financial centres such as Luxembourg in which regulations ensured the protection of the anonymity of lenders. The growth in supply of funds to the market was the use by central banks of the market in order to increase returns on their holdings of international reserves. However if there had not also been a large demand from borrowers for Eurodollar, the market would not have grown so rapidly. The reasons for the large demand from the borrowers include a US government discouragement from 1963 of borrowing by foreign companies directly from the US market through the imposition of a tax that increased the cost of borrowing in the US for borrowing in most of the industrial nations. The fact that the euro banks were free of the reserve requirements imposed on domestic banks, allowed them to maintain a lower spread between borrowing and lending rates. Another important reason of a large demand is a US government limitations on the amount of capital that US transnational corporations could shift out of the US to invest abroad, forcing them to borrow outside the US and providing the market with a major group of very creditworthy borrowers.
The domestic and the international markets have two major components: the inter-bank mechanism, and the channelling of funds from initial depositors to ultimate borrowers. However, in the Euro-markets, the former plays a far more important role, with respects to the latter, in which the markets introduced important innovations.
The general efficiency of the inter-bank mechanism in allowing banks access to funds at very short notice, as well as allowing them to place funds in the market for very short periods to earn some interest, helps to reduce the transactions and information costs in the Eurocurrency markets. This also allows them to operate on smaller margins. Two innovations, which are associated with lending to non-banks, and which have facilitated the expansion of the Euro-currency markets, are roll-over credits and the syndicated loan system.
The introduction of roll-over credits reduces the risk of interest rates moving against a bank when it tends to borrow short and long-term. It enables banks to offer higher interest rates on short-term deposits, whilst at the same time being able to commit these funds long-term, through reducing the risk of making losses if deposit rates should rise again. On the borrower`s side of the market, such roll over credits imply that interest rates at the time of borrowing are less important, because if they should fall over the course of the loan, the borrower should reap the benefits.
The second innovation is that of syndication of loans. A syndicated credit is a loan in which a group of financial institutions makes funds available on common conditions to a borrower. It allows credits of larger sizes sometimes over $1 billion, to be put together, a factor that was especially important in the financing of national balance of payments deficits.
In the lender`s point of view, it reduces the risks of international bank lending , through diversification of loans to political entities. It also provides more protection against selective defaults: unwillingness of a nation to repay its debts will be met with pressure from several countries, whose banks are involved. Negotiations were also feasible, because at the same time, there are few enough creditors involved. On the other hand, a possible danger of the process, which has become increasingly recognised, is that in the event of a default, the repercussions will be spread over a wide part of the Euro-currency system. This has raised questions regarding the stability of the international banking system.
There are certain important consequences of the rise of the Eurocurrency markets. The first is the shift in the financial system from one depending on a state to manage the flow of international liquidity, to a system where liquidity is provided by private banks. The international financial systems were threatened with a lack of credit, there is now, excess international liquidity, and private bank lending provides this. In 1980, the US inter-bank loan market stood at $74 billion, this almost doubled to $170 billion by 1995. The international inter-bank lending market by contrast had grown to $5.8 trillion by June 1995.
 

Effect of Sustainability on Economic Growth

Protecting the environment, the prudent use and re-use of natural resources and maintaining economic growth all contribute towards sustainable development.

Contents

Abstract

Introduction

Sustainable development examples

Renewable Energy

Case study.1

Case study.2

Case study.3

Energy Efficiency

Energy efficient lighting

Case study.1

Green space

Case study.1

Case study.2

Conclusion

References

This technical report will discuss the use of sustainable development on how the use and re-use of natural resources will affect the economic growth. Case studies will be reviewed and examined, with the include of examples. The examples that will be discussed further in the report are renewable energy, energy efficient lighting, and green space. Case studies regarding these topics will be debated as why there were used.  There are many types of renewable energy that can used, in this report, wind turbines will be discussed and how they have made a positive impact to society. Regarding energy efficient lighting, the old fashion light bulbs which contributes a huge amount in the carbon foot print will be compared with the energy saving blub that most people are starting to switch to. With green spaces two locations in London will looked at and how exactly they were managed to improve the environment and people around them.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

The main objective of sustainability is to make use of renewable resources and reduce consumption. The increase in population has created a stress on the environment, especially with some resources becoming scarcer. Stated by (Brundtland Commission, 1987) ability to make development sustainable-to ensure that it meets the needs of the present without compromising the ability of future generations to meet their own needs. This description contains much meaning but unfortunately allot of people have misinterpreted it for something else. Although the statement mentioned by (Brundtland Commissions, 1987) doesn’t directly state anything about the environment. Sustainability in society can be achieved if everyone contributes a little. It does not require a dramatic change in lifestyle, but only a small portion of your lifestyle to change to make an impact. There are many alternative resources that can be used. Stated in Brundtland report that sustainable development can be categorized into two concepts, which are known as “needs” and “limitations”. The limitations will be reviewed further in the report. The boundaries that have been set by the state of technology and social organization on the environments ability to meet its now and future requirements. The needs subsequently denote to the portions of the world who are underprivileged in terms of poverty.

Renewable energy is a source of energy that is from a natural process and it can be continuously re used, examples of renewable energy can be; heat, wind, sunlight. This is extremely sustainable and will not run out, as well as it is a non-pollutant and doesn’t contribute to the greenhouse effect.

Energy efficiency has become more and more of a norm in society in the last decade, but it is yet still to be a main option for some people. Energy efficiency is a method of getting the same service but with the use of less energy. This method will be discussed in depth later in the report.

Green space are specific areas which are located away from polluted areas, that allow wildlife and plants to grow without any constraints. Some green space is protected. Natural Environment White Paper will be discussed that was produced by the Department for Environment Food & Rural Affairs.

Energy is the man function of every action in humanity. Without energy we wouldn’t be able to carry out the simple tasks. It gives us food and shelter and warmth and without these variables we wouldn’t be able to survive. Currently in todays society suppliers are reliant on fossil fuels such as coal, natural gas and oil. With the increase of fossil fuel, it has put a strain on the greenhouse gas emissions. As the demand for oil and gas is increasing the price of it has risen too. Many green energy campaigners have asked the government to use more biofuels and solar energy resources. This has taken into effect in some areas in public transport with the use of Green Transport. Using electric and hydrogen buses is a start to reduce carbon dioxide emissions

Renewable energy has positively increased recently with range of 10-50% in different areas of technology. Wind energy has had a rapid growth since 2008 and continuing to grow. Solar PV also known as photovoltaic system uses cells from the sunlight to convert it to electricity, this has been the fastest growing technology out of all the renewable sectors which has had more than 60% of annual growth during the past five years. Two case studies will be discussed below in different locations of the United Kingdom, they are both based on wind farms.

The next two case studies will Discuss uses of wind turbines and why wind turbines have been used buy these local villages. Wind sites are often found in large open spaces which are usually far from cities. Wind is a sustainable source of energy that doesn’t affect the carbon dioxide emissions. Wind is caused by temperature of the atmosphere increasing with the integration of the earth’s rotation.

 

 

Case study.1

Fintry is roughly 20 miles from the north of Glasgow, it’s a rural village which contains about 500 individuals. The households in Fintry does not have any supply to gas mains, fuel poverty has become a serious problem in Scotland. The village of Fintry has fought back and in 2006 plans were made by outside designers to construct 15-wind turbines which would overall generate a capacity of 37.5MW. This was a huge impact to a small village in Scotland, this would increase the fuel energy and reduce the carbon foot print. The community now receives 1/15th of the total income from the wind farm, which they use this money to fund low-carbon projects.

The cost of installation for the turbine was paid by the designers, it was agreed by the community that the sum would be paid back over the first 15 years of the operation. The profits from the wind turbine are shared by Fintry Development Trust, as its commercial partner Fintry Renewable Energy Enterprise receives the profits and owns the turbine. The completion of this project shows that the use of renewable energy can increase economic growth without damaging the environment.

Case study.2

Coldham wind farm is situated at Coldham hall farm in Cambridgeshire. Already containing eight wind turbines they went ahead and added seven more. This plan was agreed by two companies, known as The Co-operative Group and Scottish Power Renewables. The first eight turbines were 8 Vestas V-80, and the rest of the seven were built between 2010 and 2011. The turbines have blades which are 40m long and the height of the turbine itself is 60m. Each turbine would supply around 2MW and around 37M KWh. Facts and figures stated by the Coldham site includes 8,500 homes are now powered by the turbine.

This project shows that the use of renewable energy can power thousands of homes without increasing the carbon emissions. Using wind as a renewable energy in wind farms can have a major impact. There are few downsides that can been seen from the project the initial price of installation can be extremely expensive. It can also be danger to wildlife such as flying animals, but overall it has contributed more into households in Cambridgeshire.

Case study.3

As the Carbon dioxide levels are rising from the use of public transport, it has become a bigger problem to tackle it and reduce these emissions. Before 2006 hardly any care went to considering the emission from public transport. There has been a huge difference in the United Kingdom since the international transport policy. This research has been carried out by Dr Robin Hickman. In more recent times public transport has gone green and become more sustainable.

London has now over 2,000 diesel- electric hybrid busses which are running in the city centre. These buses are now more fuel efficient and reduce emissions around 30-40%. It has been reported that Transport for London is now targeting to have 240 electric buses successively on the network by the end of early next year. All new double-decker buses to be zero-emissions or hybrid. All single-decker buses functioning in central London is expected to be zero-emission by the following year.

London has significantly changed, buses that use to run on diesel are on now alternatives such as hybrid and electric buses, the mayor of London has worked extremely hard to change this.

London has now over 2,000 diesel- electric hybrid busses which are running in the city centre. These buses are now more fuel efficient and reduce emissions around 30-40%. It has been reported that Transport for London is now targeting to have 240 electric buses successively on the network by the end of early next year. All new double-decker buses to be zero-emissions or hybrid. All single-decker buses functioning in central London is expected to be zero-emission by the following year.

London has now over 2,000 diesel- electric hybrid busses which are running in the city centre. These buses are now more fuel efficient and reduce emissions around 30-40%. It has been reported that Transport for London is now targeting to have 240 electric buses successively on the network by the end of early next year. All new double-decker buses to be zero-emissions or hybrid. All single-decker buses functioning in central London is expected to be zero-emission by the following year.

Every household has a considerable amount of energy being emitted but the questions is how much energy is being consumed needlessly, and how much of that energy is being wasted. It’s shows that more than 85% of the suppliers use carbon-based fuels. Coal, Oil and natural gasses how long will this last until it eventually runs out. Leaving a high carbon footprint has consequently caused an increased level of the Greenhouse gas.

Energy efficiency is all about obtaining the same goal but using a lower amount of energy, it’s the process of using less energy in devices and machines. More and more of us have become aware of changing our light bulbs but is society aware of what else can be done. Many homes during the winter increase their heating to keep warm but adding insulation to the attic or into the walls can retain more heat than just keeping the heating on. Double glazing windows can be replaced with windows that cause drafts and hot air to escape. All these factors can be done to make a home more energy efficient. It is vital to lower the consumption of energy in structures because it plays a significant role in combating unsustainable levels of energy. Shown below on Figure 1.1 the energy used within the EU at different function in residential and commercial structures.

 

Figure 1.1 EU building energy consumption for residential and commercial buildings Source (www.intuser.net)

Energy efficient lighting

Energy efficient lights have become more and more common in the past decade, its one of the easiest ways to save energy. The improvement in technology has seen the size of the light bulb decrease. LED lighting gives quick payback and can reduce energy cost up to 70%. Consumers are now able to buy wide range of lights for different variety of households.

Find Out How UKEssays.com Can Help You!
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
View our services

The use of energy saving light bulbs will only consume a quarter of the electricity of a standard light bulb, although using an energy saving light bulb will depend on a few factors. Note older version of a light bulb that not energy saving is referred to as halogen light bulb. The table below shows the comparison of a 5-watt LED against a 50-watt halogen. Halogen light bulbs are soon to become banned by the European Union.

 

Figure 1.2 comparison between LED and halogen. Source(thegreenage.co.uk)

Figure 1.2 indicates that each halogen bulb will save you £175 during a consumer’s life time. This shows how far technology has come and how easy and cheap it is to save energy in your house. Energy efficient light bulbs should be considered not only in residential houses but in industrial facilities too. Some companies have warehouses that run day and night, for example if all the light bulbs in a warehouse was changed to energy saving, they could save up to 60% monthly on energy. It is therefore reasonable to say that the industrial sector and the common household will have a huge impact and reduce greenhouse gas emission if switched to energy saving

Case study.1

A project that was undertaken was at Shuqualak Lumber. It consists of a warehouse that stored lumber. The current lights that was used in the warehouse was a health and safety concern as it wasn’t bright enough and it was also considered a waste of energy due to its inefficiency the scheme involved of changing the interior and exterior lighting from the old fashion inefficient fluorescent to efficient LED lighting. It was reported that the LED lighting would save up to 73% would eliminate lighting maintenance cost up to 11 years because the longevity hours the LED would provide.

Reported by Semco, the new LED lights increased the brightness up to 15% in certain areas. Figure 1.3 shows the difference before and after the lights have been changed. The project was given over $121,000. The annual saving is as shown below.

Figure 1.3 Before and after image of fluorescent light to LED lights. Source (Semco Sustainable energy management

 

 

 

 

Using energy efficient light bulbs are a significant sustainable factor, more companies and households and should use LED lights as they are very efficient. Energy efficiency includes not only the physical efficiency of the technical equipment and facilities but also the overall economic efficiency of the energy system as seen in the case of energy efficient light bulbs previously. It is therefore sensible to say that energy efficiency (such as the one discussed in this section) measures in the industrial sector and built environment will enhance profitability which will help maintain economic growth, reduce greenhouse gas emissions which helps to protect the environment and combined aids in promoting sustainable development

Green space is urban areas in London is an important contribution to the economics growth and health to humans, this section will discuss projects that have taken place in London to improve areas of Green spaces. Almost 47% of London consist of green space. The Committee Environment is planning an investigation how green spaces can be managed and maximise it to our benefit.

Having Green spaces in our environment is an extremely important entity, it contributes to the sustainable development in civilisation. The population is increasing year by year and more land has been chosen to develop flats for commercial use or residential use. Increasing Green spaces can benefit from green spaces, it can help the ecosystem and give good mental health to the people around the green space. It has been reported that green spaces can improve the well-being and can also be a way to treat mental health. Stated by (Jane Jacobs 1961) the death and life of great American cities, parks are volatile, they can and do add great attraction to neighbourhoods that people find attractive for a great variety of other uses.

 

Case study.1

Greenwich Peninsula situated in the south east of London, in the Royal Brough of Greenwich, it is best known for its agricultural fields and marsh lands. Between 1880 and 1900 the area was used for industrial purposes. The construction of the black wall tunnel eliminated any of the remaining marsh lands. During 1970 any chemical works that was taking placed came to an end, causing the marsh land to reappear. From 2002 the area has been managed by The Conservation Volunteers.

In more recent times the landscape has changed for the better, and now it’s designed to be a central park and an ecology park. It now plays a vital role in the regeneration of the Greenwich Peninsula. Whilst planning was taking place to improve the park, it was stated that the natural environment should be protected. The product of this was that all the parks were integrated together.

Central park, Ecology park and Southern park are now all connected, it has been designed so that the green space is protected. The new design of the park was constructed to form an inner lake and an outer lake. The project is still proceeding and not to be fully complete for another few years. From this redevelopment it has shown that over 10,000 tress and over 50,000 shrubs have been planted, this has made a big impact on the ecological environment and for people living in the area.

This urban environment that has been renewed into a green space from what use to be an industrial site. With the impact of all the trees and shrubs that have been planted, it can increase the quality of air and reduce energy consumption by opposing the heat effects of paved surfaces. With over 10,000 tress in the park it can it can reduce on site heat build-up.

Case study.2

The river Quaggy is a river that has a length 17km, also known as an urban river. The location of this river is originating from Lewisham and ends towards Sundridge situated in the London Borough of Bromley, Greenwich and Lewisham. During the 1960’s the river managed by artificial channels and culverts to divert the water. One part of the river that runs through the park use to be fully enclosed underneath the surface in concrete. An arrangement had been designed by the Environment agency to transform the park so that it behave as a natural flood plain. ­

This scheme was proposed by residents who came from the Quaggy Waterways Action Group. It was idealised that soft engineering methods should be taken into place to improve the environment. Many local animals in the area where to be protected while the restoration was to take place. Restorations plans were done so that the river would rise back above ground level again. The was to be lowered and the design of a shape was made so that the flood plain could collect water naturally in downstream channel. By changing the direction of the river in a more natural way, the project created a wetland environment for wild flowers and trees.

Figure 1.4 shows River Quaggy running through Sutcliffe Park. The flow of the river is now directed through reconstructed path of the original route. During adverse weather the increase of water will enter the old trenches and discharge into the park to form as a temporary lake. The restoration of the park included the plantation of waterside plants. This has had an increase in wildlife to the area and will continue to develop. Greenspace is extremely important as it effects the mental health. It has been proven that many individuals have a reduces amount of stress and anxiety when living in an area of more greenspace.

 

Figure 1.4 River Quaggy running through Sutcliffe

In this report multiple case studies were mentioned about and reviewed for different situations locations, for example Green spaces and renewable energy. The whole purpose was to gain a better understanding of the contributing influences in sustainable development so that each study which related to a sustainable approach and would be reviewed. Going back to the Brundtland Report which was mentioned at the beginning of the report, sustainable development was defined as the ‘needs’ and ‘limitations’ of our future and present generations. Looking at the case studies and examples from this report, a clear impact in sustainable development was seen and hopefully more to come of our society. Its clear to say that the economic growth will increase with the more use of sustainability.

Looking back at the green space case studies earlier in the report, it clear to say that it provides us with many benefits to the ecosystem, not only to wildlife but to social health too. Wildlife and vegetations that was endangered and not looked after, are now protected and helped to preserve economic growth. The project that took place in the south-east of London, created a natural flood plain which reduced the risk of flooding to residential areas and business. By integrating the parks so it can be used by people living in the area and so that wildlife can also have a part in the ecological system. This project shows that flood management was carried out and reducing the adverse effect of microclimates.

With relation to renewable energy the case studies demonstrated the impact that wind energy had in terms of protecting the environment from carbon dioxide emissions. One of the downsides to building the wind turbines was the danger to flying animals in the area. It is also a factor of noise pollutions; wind turbines can generate allot noise. Many procedures are taken to install them away from households but sometimes they are impossible to avoid and can damage some residents. Ultimately the reason for installations was to power thousands of homes just with the use of natural source is invaluable and without a doubt contributes to sustainable development. Therefore, as renewable energy is a long-term advantage in terms of maintaining and increasing economic growth. This has definingly helped protect the environment it can be stated that for this example, the criteria for sustainable development to be valid are met and protecting the environment and economic growth are contributing factors.

While discussing energy efficiency was carried out in terms of sustainable development. Energy efficient light bulbs were chosen because of the way to improve energy efficiency. It was noticed that up to 70% savings could be made by using energy efficient light bulbs this reduction in energy consumption would reduce greenhouse gas emissions, which help to protect the environment and since less energy is being consumed this would decreases the amount of fossil fuels being used up. Therefore, the criteria for sustainable development to be valid are met and protecting the environment and maintaining economic growth and protecting the environment are the contributing factors.

Overall after studying and checking through the case studies and examples about sustainability it was noticeable that a surge in sustainable development could be gained using Green spaces. The renewable energy and use energy efficiency made a huge impact in saving money. Making sure that the environment was protected, whilst reusing natural resources to maintain economic growth are all essential contributions in order to promote sustainable development.

Brundtland Report, World Commission on Environment and Development (WCED), Our Common Future (New York: Oxford University Press, 1987), 8.

Coldham Wind Farm: Article 2, http://www.theguardian.com/vestas/coldham.wind.farm, (Accessed on January 17, 2014)

Coldham Wind Farm: Article 2, http://www.theguardian.com/vestas/coldham.wind.farm, (Accessed on January 17, 2014)

Jane Jacobs, (The death and life of great American cities, 1961)

Growth Kinetics of Microorganisms in a Shake Flask

Abstract
This experiment is carried out to study the growth kinetics of microorganisms in shake flask. E.coli is grown in a LB broth medium and being fermented for 24 hours. Throughout the fermentation, the cell culture is taken out for every 3 hours and protein test, glucose test and cell dry weight are being performed. As for the optical density analysis, the absorbance reading from the spectrophotometer is taken while for the glucose test, the reading of glucose level is taken from the YSI 2700 Select Biochemical Analyzer or can also being performed by using DNS reagent and the absorbance value is taken. These absorbance values will then being compared with the standard curve to get the glucose concentration inside the shake flask at particular time. The cell dry weight, in the other hand, is taken after the mass concentration is being dried overnight in the oven. The weight of the viral which contains the biomass before and after the drying process is recorded to get the dry cell weight.

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

For the optical density of the cell, the absorbance value showed an increment which indicating that the cell was growing and number of cell is increased in the shake flask. The glucose concentration, however, cannot be determined as the absorbance values were increased and decreased unevenly and comparison cannot be made with the standard curve as the data for the standard curve are not consistent giving inaccurate curve. Therefore no conclusion can be made about the glucose concentration in the shake flask. Supposedly, as the number of cell increased, the glucose concentration would decrease as the glucose consumption by the cells is increased.
The dry cell weight in the other hand can be seen that there is an increment from the beginning of the cultivation until the 6th hour and showed unstable changes until the 24th hour. Supposedly, as the number of cell increased inside the shake flask, the cell dry weight also should be increased.
Introduction
Fermentation can be carried out as batch, continuous and fed-batch processes. In this experiment, the shake flask fermentation is being used. Shake flask fermentation is the example of batch fermentation. In shake flask, the culture flask usually Erlenmeyer flask is being used to place and growing the microorganisms. It is the cheapest and easiest way to culture microorganism aerobically, in small volumes of nutrient broth. It is a small scale equipment which equivalent to stirred tank bioreactor.
In order to prevent any contamination to the culture, shake flask must be plugged. Different plug can be made of cotton-wool, glass wool, polyurethane foam, gauze or synthetic fibrous material. The plug has to prevent airborne microorganism from getting into the medium while at the same time allowing free flow of air into the flask.
The cultures are incubated at certain temperature and shaking frequency in an incubator shaker to achieve a required growth rate. The shaking agitates the medium and the culture to keep the mixture relatively homogeneous and also to ensure aeration, creating an aerobic condition. In batch culture, there is neither input supplied nor output generated throughout the fermentation. The medium culture is initially inoculated with the microorganism. The growth keeps increasing until at certain extent, the growth is inhibited because of the decreasing substrate concentration and the presence of toxic metabolites.
Aims

To study the growth kinetics of microorganism in shake flask experiment
To construct a growth curve including lag, log, stationary and death phases
To determine the Monod parameters

Theory
Shake flask fermentation is one of the examples of batch fermentation. Batch culture is an example of a closed culture system which contains an initial, limited amount of nutrient. The inoculated culture will pass through a number of phases. After an inoculation there is a period during which no growth appears to take place. This period is referred as the lag phase and may be considered as a time of adaptation. In a commercial process, the length of the lag phase should be reduced as much as possible. Following a period during which the cell gradually increases, the cell grows at constant, maximum rate and this period is known as the log phase or exponential phase. The exponential phase may be described by the equation below:
= µx ——————-1
where
x is the concentration of microbial biomass
t is the time, in hours
µ is the specific growth rate, in hour -1
on integration, equation (1) gives
= ——————2
where
is the original biomass concentration
is the biomass concentration after time interval, t hours
During the exponential phase, the organism is growing at its maximum specific growth rate, for the prevailing conditions.
Equation 2 predicts that growth will continue indefinitely. However, growth results in the consumption of nutrients and the excretion of microbial products. Thus after a certain time the cell growth rate will decrease until growth ceases. The cessation of growth may be due to the depletion of some essential nutrient in the medium when there is limitation in substrate.
The decrease in growth rate and the cessation of growth due to the depletion of substrate may be described by the relationship between µ and the residual growth-limiting substrate as follows:
µ =
where
= maximum growth rate
s = residual substrate concentration
= substrate utilization constant
The stationary phase in batch culture is the point where the growth rate has declined to zero. In the other word the growth rate is equivalent to the death rate. The cell death is might due to the nutrient limitations due to their incorporation into cells during log-phase growth or a build-up of toxins due to their release of fermentation products also during log-phase growth.
The death phase is the result of the inability of the bacteria to carry out further reproduction as condition in the medium become less and less supportive of cell division. The nutrient is extremely insufficient for the growth of the microorganism. Eventually, the number of viable bacterial cells begins to decline at an exponential rate. Industrial fermentation is usually interrupted at the end of the exponential growth phase or before the death phase begins.
Apparatus and material

E.coli
Luria Bertani Broth
Distilled water
Shake flask
Cotton-plugged
Incubator shaker
Cuvettes
Centrifuges
Micropipetor
Pipette tips
Laminar flow
70% ethanol
Lighter and Bunsen burner
Graduated cylinder
Schott bottle
DNS reagent

Procedures
Part 1: Preparation of inoculated fermentation medium
500ml shake flask, bunsen burner, measuring cylinder, LB broth and inoculums are brought into the laminar flow.
Under aseptic technique, 50 ml of media is transferred into 500ml shake flask.
Then 6 ml of inoculums is added into the shake flask resulting in final volume of 56ml.
The shake flask is plugged with cotton-plugged.
The shake flask is swabbed with 70% ethanol.
The shake flask is incubated at 350 rpm; T=30ËšC; 24 hours.
Part 2: Sampling for cell dry weight
1ml of biomass concentration is taken out.
The 1ml biomass concentration is transferred into micro centrifuge tube. An empty micro centrifuge tube must be weighted first.
The sample is then centrifuged for 10 minutes at 10000 rpm.
After that, the supernatant of the sample is taken out carefully without taking out any biomass.
The biomass is then left dried inside an oven at 80C for overnight.
The dried biomass is then being placed inside a dessicator to let it cool before rapidly weighing on an analytical balance.
Part 3: Glucose analysis
1ml of biomass concentration is taken out.
The 1ml biomass concentration is transferred into micro centrifuge tube.
The sample is then put onto turntable of YSI 2700 Select Biochemical Analyzer for direct analysis of glucose concentration.
Another method of glucose analysis is by using DNS reagent.
1.5ml of DNS reagent is added into 0.5ml of the biomass sample inside a capped test tube
The mixture is heated at 90ËšC for 10 minutes to develop the red-brown colour.
The heated mixture is then cooled to the room temperature for 2-3 minutes in a cold or ice water.
The mixture is then being diluted with 10ml of distilled water.
The absorbance is checked with a spectrophotometer.
Part 3: Sampling for absorbance analysis/ optical density
2ml of biomass concentration is taken out and being transferred into micro centrifuge tube.
The spectrophotometer is calibrated to zero by blank consisting of 2ml LB Broth.
The biomass concentration is then being transferred into a cuvette and optical density measurement is taken with wavelength set at 600nm.
More absorbance means higher number of cell.
Part 4: The preparation of glucose standard curve
The 20g/L, 40g/L, 60g/L, 80g/L and 100g/L of glucose concentration is prepared by weighing the suitable amount of glucose and diluted with 10ml of distilled water.
1.5ml of DNS reagent is added with 0.5ml of the glucose sample inside a capped test tube
The mixture is heated at 90ËšC for 10 minutes to develop the red-brown colour.
The heated mixture is then cooled to the room temperature for 2-3 minutes in a cold or ice water.
The mixture is then being diluted with 10ml of distilled water.
The absorbance is checked with a spectrophotometer
 
Discussions
This experiment is carried out to study the kinetic growth of microorganism. E.coli is selected as the cell and being cultivated inside a shake flask. The growth of microorganism in shake flask is a simple method of fermentation. The nutrients for the microorganism are being supplied by the media which contain the carbon sources. The flask is shaken during the cultivation to mix the cell and the media; increase the homogeneity between these two and also to provide aeration for the cells. The culture is gone through the fermentation process for 24 hours. Within that period, the biomass/cell sample is taken out for every 3 hours to analyze the concentration of the cell (g/L), the cell dry weight and the glucose concentration.
In order to analyze the concentration of the cell inside the flask, absorbance reading for the optical density is taken from the spectrophotometer. The higher the absorbance reading means higher number of cell presence inside the flask at a particular time. As for this experiment, the absorbance reading is increase from the beginning of the experiment until the 21st hour and decrease slightly at the 24th hour. It can be explained that the number of cell increase throughout the cultivation indicating that the cell is growing. In the other hand, the decrease in cell number in 24th hour indicating that the cell growth has reach its deceleration phase where the growth of the cell is started to slow down. The decelerating growth phase is where the culture is in a transient state. During this stage there are feed/back mechanisms that regulate the bacterial enzymes involved in key metabolic steps to enable the bacteria to withstand starvation. There is much turnover of protein for the culture to cope with this period of low substrate availability. In cell growth, the cell will go through several phases like lag, exponential, deceleration, stationary and death phase.
In cell cultivation, the cells themselves need food or carbon sources like glucose for growth. In batch fermentation for example in this experiment, the glucose can be the limiting factor for the cell growth or we called it as substrate limiting growth. For this condition, the Monod equation can be used to predict the growth rate and the cell concentration inside the shake flask. In addition, the glucose concentration can be known by testing the cell sample into the glucose analyzer and the direct glucose concentration can be obtained. In other way, the glucose concentration is also being obtained by mixing the sample with DNS reagent. The DNS reagent will be reduced to 3-amino,5-nitrosalicylic acid in the presence of free carboxyl group (glucose) and absorbance reading can be taken through the spectrophotometer.
As for this experiment, the glucose test showed no pattern of changes in absorbance values. These values increase and decrease unevenly. This might be due to some mistakes occurred during the glucose test where the volume of sample and DNS reagent that need to be mixed is incorrectly taken. This has affected the accuracy of the absorbance reading. From the absorbance reading, the concentration of the glucose can be obtained by referring to the glucose standard curve. The glucose concentration should be decreased as the number of cell inside the flask is increased. This is because as the number of organism increases, nutrients are consumed and becoming lesser. However, this cannot be shown from the results obtained due to some mistakes occurred throughout the experiment.
Another analysis that can be performed to analyze the cell sample is by taking the dry weight of the cell. In this method, the cell is being taken out from cultivation flask and transferred into viral tube. The tube is the being centrifuged to separate the supernatant with the cell. The remained cell is then being dried inside an oven for 24 hours. The dry cell weight is finally taken to know the weight of the cell that present at particular time during the cultivation. In this experiment, the cell dry weight is increased from 0th hour until 6th hour and gradually decreased from the 9th hour to 12th hour and increased until the 24th hour. The cell dry weight should increase when the number of cell increased inside the shake flask.
Conclusions
At the end of this experiment, microorganism is suitable to be fermented inside a shake flask and it is a simple method to investigate the growth kinetics of the microorganism. Knowledge of microbial growth kinetics is essential to determine when to harvest the culture for different purposes. For a growth-linked product, it is desirable to harvest the culture at the late exponential growth phase. On the other hand, for a non-growth-linked product, it would be desirable to harvest the culture at the stationary growth phase.
As microorganism will go through several phases in their growth, several analyses on the cell need to be done to know the growth kinetics of the cell and the duration for each phase. This includes the cell concentration, glucose concentration and also the cell dry weight analyses. This method can be done in the laboratory before the fermentation or the cultivation of microbes in large scale is performed. Growth kinetics deals with the rate of cell growth and how it is affected by various chemical and physical conditions. During the course of growth, the cells is continuously changing and adapting itself in the media environment, which is also continuously changing in physical and chemical conditions.
In conclusion, the microbial culture in batch culture system (shake flask system) goes through a lag phase, exponential growth phase, decelerating growth phase, stationary phase and sometimes the death phase depends on the end product desired. The substrate concentration in the culture medium and growth parameters, such as glucose concentration changes correspondingly throughout the growth phases. Thus, the physiology of the microorganisms is always in a transient stage, subjected to a continually changing culture conditions. Consequently, product formation is confined to a certain period of cultivation, for example antibiotics would only be produced in the decelerating and stationary growth phases.
The batch culture system is still widely used in certain industrial processes for example brewery industry because of its easy management of feed stocks. These advantages allow the use of unskilled labour and low risk of financial loss. Low level of microbial contamination in fermented products is at time tolerable, as long as the microbial contaminants are not pathogenic and do not alter the desired properties of the product, such as taste, colour and texture.
Recommendations
Aseptic technique must be practised when handling biomass concentration to avoid any contamination.
Cuvette must be wiped cleanly to prevent any scratch that would affect the spectrophotometer reading during protein test.
This experiment must be carried out under the laminar flow to prevent any contamination to the culture.
The supernatant of cell concentration should be taken out carefully without any taking out of the biomass.
The cap of the viral must be opened to fasten the drying process of the biomass in the oven.
Wash hand after handling the culture.
Disinfect the work area with 70% alcohol before handling the culture.
Dispose of all contaminated materials in appropriate containers.
 

Human Capital Migration and Economic Growth

Abstract

Human Capital Migration, also known as the “Brain Drain,” has been a growing concern in the world. This study was conducted to understand the relationship between migration, human capital and economic growth to describe factors that impact “brain drain” within the United States. The researchers identified variables to support three different models based on a previous study that was conducted to compare 77 countries from around the world. The models are migration, human capital and growth. The variables analyzed for the migration model were not statistically significant. For human capital, there was a relationship between average life expectancy and human development index. In the growth model, unemployment rate played a role in relation to growth within the United States.

Human Capital Migration and Economic Growth

 

Introduction

Human Capital Migration is the migration of highly skilled and/or educated individuals from one geographic region to another. For example, these individuals could be engineers, physicians, scientists, teachers or even doctors.[1] Human Capital Migration is also very commonly known as “Brain Drain” and has been a big issue and concern worldly for centuries and now it is an issue nationally within the United States. Due to this being a great issue of concern, governments have been trying to determine for years better ways to retain these highly skilled individuals, so they can attribute to the betterment of the economy in specific geographic locations.

When trying the determine ways to retain individuals, it is important to determine what factors contribute to brain drain. In a 2005, a study published by the Journal of Applied Econometrics and International Development equations were formed to better understand the relationships migration (brain drain), human capital, and economic growth and to understand what economic variables directly affect them. The study created three models to determine if the relationships between certain variables had a strong relationship and contributed to over all human capital migration. [2]

The purpose of this research is to test if economic growth indicators impact human capital migration within the United States. Therefore, it is important to determine which variables have a direct impact. This study will conduct a multiple regression to answer the following question:

What economic growth factors play a role in Human Capital Migration?

During the research, three models will be used similar to the study described above to answer the research question when applied to the United States population. The first model will be migration and the variables used will be unemployment rates, wages and per capita income, to calculate the migration to other states. The second model will be human capital, the variables used for comparison will be average life expectancy, education index and human development index. The third model is the growth model and the variables used will be, human development index, net rate of migration and unemployment rate. These three models will be constructed in this study and a multiple regression will be conducted on each one, to give an understanding if Economic Growth indicators Impact Human Capital Migration within the United States.

Literature Review

Dating back to the 18th century, economists have been studying the economic benefits of human capital overall. The study of human capital, whether it is lost or gained, has grown tremendously and has also broadly become a focus area for developing countries and developed countries. Human capital is an important benefactor in the determination of economic development.

Human capital migration is also referenced as “brain drain” and “human capital flight” but is essentially the systematic loss of skilled, knowledgeable, well-educated individuals to other organizations, cities, states or even countries.[3] The term “brain drain” was initially coined by the Royal Society of London in 1963 describing migration of British scientists to US countries.  The “brain drain” has become an economic concern amongst countries and now even individual states and policymakers in the US. Countries and states that fail to keep the skilled individuals within their borders or fail to attract them are at risk of economic stagnation. [4]

Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Essay Writing Service

Most scholarly articles and studies that view human capital migration and the causes seem to be conducted in other, usually lesser developed, countries as they are experiencing the “brain drain” to the United States. Several studies describe causes of human capital migration as “push” and “pull” factors. “Push” factors are negative characteristics of the home country usually from people migrating from lesser developed countries. “Pull” factors are characteristics that would attract the immigrant back to their home country. [5]

A study was conducted in Taiwan to understand their issue of brain drain to the United States. It examined these “push” and “pull” factors of their native immigrants. The “pull” factors into the US are as follows: 1) Better teaching/research facilities, 2) Promising career prospects and better professional opportunities, 3) High Salary, 4) Strong job satisfaction and 5) Marital and family consideration. The “push” factors in Taiwan that explain their immigrants reasoning to not to return include the contrary to the pull factors such as: 1.) Low salary, 2.) Inadequate research facilities, 3) Few opportunities for career advancement, 4) Lack of political freedoms and, 5) Poor intellectual atmosphere. [6] Several other studies describing other countries, indicate similar, if not identical, factors.

In a study looking at emigration of skilled Africans to industrialized countries, negative and positive impacts were described. Negative impacts included quantity of skilled workers decreased, increase in dependence on foreign aid such as financial or technical assistance, transfer in technology slows down and loss of money in income tax revenues and in potential contributions to GDP. Positive impacts were that migrants returned with new skills and house hold welfare increased.[7]

There is vast literature for economic analysis and human migration, both independently. However, to intersect both literatures, the results are small.  Bildirici (2005) examined 77 countries for the period 1990 – 2001 to determine the relationship of human capital, growth and brain drain.[8] They observed the effects of brain drain on economic growth. The countries were classified as developed (GDP index above 0.85), developing (GDP index between 0.50-0.85) and least developed. It is assumed that migration increased growth in the developed countries. Data obtained for their models were gathered from sources like Human Development Report and World Development Indicators. In their analysis brain drain is measured by migration rate, human capital is measured by human development index. Variables used in their model were, for example, average life expectancy, adult literacy rate, schooling rate, per capital income (pci), GDP index, human development index, and general population growth.  Some of the results indicated that when there was a lack of employment, per capita income and wages increased and the frequency of migration decreased. It also discovered that when poverty increased, migration increases with it and that the reason why migration decreases as unemployment increases is that people cannot invest in human capital and cannot afford the cost of migration.4

Literature proposes that small countries or states face more problems in the loss of skilled individuals because they lose a larger portion of their skilled labor force or they are faced with more push factors. One study argues that economic growth of a small country can be a triggering event for the emigration of people. Increasing the GDP per capital can reduce the flow of emigrants from a country.[9] 

More research has been needed for the effects of human capital migration, not only into the states, but migration between states, as well. Some literature states that given the rise in economies like India and China, the United States is in need of high skilled immigrants, However, political leaders are in debates about the influx of low-skilled workers that are entering the US illegally so immigration itself has become a political nightmare. The number of skilled immigrants in the United States waiting to gain legal residence is now exceeding one million.[10] The US could be experiencing its first brain drain since fewer high-skilled workers are coming to the US. The economic growth that the US would be experiencing is occurring in China and India as mentioned above.

This leads the researcher to evaluate the United States to compare relative migration, human capital and growth indicators to assess whether there is correlation between human capital migration and economic growth.

Methodology

In 2005, a study from the Journal of Applied Econometrics and International Development, titled Determinants of Human Capital Theory, Growth and Brain Drain; an Econometric Analysis for 77 Counties was conducted by Dr. Melike Bildirici, Melda Orcan, Seckin Sunnal, and Elcin Aykac to understand the relationship between human capital migration and growth in 77 counties around the world from the period 1990-2001. This study used data from many different data sets including Human Development Reports, World Development Report, and Financial Statistical Yearbook. The research provided three models that was used to understand the impact of Brain Drain. The models use various variables including average life expectancy, adult literacy rate, and population. This study’s research provided the base model for the purpose of understanding human capital migration and growth in relation to Brain Drain in the United States for this study. [11]

This study was conducted to understand the relationship between human capital migration and economic growth with relation to Brain Drain within the United States. The “Determinants of Human Capital Theory, Growth and Brain Drain; an Econometric Analysis for 77 Countries” study’s research was used has the base for answering the following research question. [12]

What economic growth factors play a role in Human Capital Migration?

  Each model was created and used to answer the research question proposed above to understand Brain Drain within the United States population. Therefore, a Migration, Human Capital, and Growth Model was created with varies independent variables, which are defined in Table 1 of the appendix. U.S. Population was used as the dependent variable. All variables were used as described in the literature. Below are the three models used within to answer the research question based on the literature.

Migration Model: This model used the unemployment rates, wages index, per capita income and average life expectancy to calculate which variable was significance within the United States Migration.

Human Capital Model: This model used education index, average life expectancy, and Human Development Index to calculate which variable was significance with United States Human Capital.

Growth Model: This model used human development index, net rate of migration, and unemployment rate to calculate which variable was significance within the United States Economic.

A multiple regression was conducted on all three models to understand the relationship between each model’s variable. The multiple regression determined which variables were significant to each model. The data for the variables was extracted from the World Bank database and U.S. Census Bureau. All independent variables and dependent variable data were used from 2010 through 2017, making a total of eight yearly data points for each variable. The statistical analyses were derived using Excel 2018 with the inclusion of Excel 2018 Add-In, Analysis TookPak. The multiple regression analyses were built to study the relationship between each variable within a model and determine which variables are significant to that model.

Analysis

The Migration Model, Human Capital Model, and Growth Model were analyzed using the multiple regression method, as detailed in the Determinants of Human Capital Theory, Growth and Brain Drain; an Econometric Analysis for 77 Countries study. The use of this method gave way to answering the research question and testing the thesis statement by analyzing which variable(s) were significant to each model. The following table shows the results of the multiple regression of each model.

Table 2: Multiple Regression for Each Model

F

Value

R

Square

Y Intercept

P-Value

Unemployment Rate

Wage Index

Per Capita Income

Average Life Expectancy

Education

Index

Human Development Index

Net Rate of Migration

Migration Model

334.83

.997

1734296496.48

0.16

.28

.07

.07

Human Capital Model

3019.05

.999

526630948.21

.00

.94

.01

Growth Model

218.04

.988

371149886.36

.05

.87

#NUM

 After conducting a multiple regression on each model, the test showed the following results for each model.

Migration Model: The migration model was conducted to determine if there was a linear association between the U.S. population and unemployment rate, wage index, per capita income, and average life expectancy. The multiple regression showed the p-values of unemployment rate at .16, wage index at .28, per capita income at .07, and average life expectancy at .07. All p-values showed greater than the significance level of .05, thus it can be concluded, the F-test was not significant and fail to reject the null hypothesis, indicating evidence that there is no statistically significant between the variables and population.

Human Capital Model: The human capital model was conducted to determine if there was a linear association between the U.S. population and average life expectancy, education index, and human development index. The multiple regression showed the p-value of average life expectancy at .00, education index at .94, and human development index at .01. Average life expectancy and human development index showed p-values less than the significance level of .05, therefore the F-Test was significant and reject the null hypothesis that these factors do play a role in brain drain within the U.S. Thus, there was a relationship between average life expectancy and human development index in relation to the U.S. population.

Growth Model: The growth model was conducted to determine if there was a linear association between the U.S population and unemployment rate, human development index, and net rate of migration. When the multiple regression was conducted the first time, the results showed a #NUM for the p-value of net rate of migration due to data points missing. Missing data points is because the variable is reported every five years. Net Rate of Migration was removed from the multiple regression and a new multiple regression was conducted using the other two variables compared to U.S Population. The new multiple regression showed the p-value of unemployment rate at .05 and human development index at .87. Unemployment rate’s p-value showed less than the significance level of .05, therefore the F-Test was significant and reject the null hypothesis. Therefore, it can be concluded that unemployment rate does have a relationship with population.

The purpose of this research was to understand if economic growth indicators impact human capital migration within the United States. Therefore, this research paper conducted a study to answer the following question: What economic growth factors play a role in human capital migration? The analysis provided information that showed that average life expectancy, human development, and unemployment rate are statistically significance to the U.S. population in relation to brain drain. Therefore, the hypothesis can be rejected, meaning Human Capital Migration impacts Economic Growth.

Conclusion

According to the results from the analysis, it was determined that there are certain economic variables that directly affect human capital migration. The migration model was the only one that did not reflect a strong relationship between U.S. population and unemployment rate, wage index and per capita income. Due to there not being a relationship with these variables, it can be concluded that these factors do not play a role in migration of people within the U.S. The human capital model was conducted to determine if there was a linear association between the U.S. population and average life expectancy, education index, and human development index. The multiple regression showed us that there was a strong relationship with average life expectancy and human development index in relation to the U.S. population. The growth model was conducted to determine if there was a linear association between the U.S. population and unemployment rate and between human development index and net rate of migration.

When originally conducting a multiple regression, the variables compared to U.S. population, there was an error because one of the variables (net rate of migration) is only reported once every five years. Net rate of migration was then removed from the multiple regression and a new regression was tested. The new regression showed there was a strong relationship between unemployment compared to the U.S. population. In conclusion, it was determined that the research was able to solidify the thesis and answer our research questions. Through the analysis, it was determined that certain economic variables do effect human capital migration, which include unemployment rate, average life expectancy and human development index.  

Limitations

As mentioned, there were several limitations encountered, when trying to determine if economic factors truly affect human capital migration. When attempting to obtain information of migration rate on a yearly basis, information could only be found for every five years. This cause an accurate analysis of this variable. This was an issue due to all of the other variables consisting of data that was collected yearly between the years of 2010-2018. The research also encountered the lack of literature that merges human capital migration with economic growth creating a limitation.  There was much information on human capital migration and what exactly it is, but when it came to be determining the effects of economic factors caused by migration, there was a great lack of literature in this subject matter. Lastly, there was lack of prior studies on human capital migration within the United States. Most of the literature that could be found consisted of studies from abroad, that referenced developing countries.

Further Study

 

As far as conducting further study on this subject matter, there are a number of topics that can be considered to take this research a step further. First, would be to increase the number of years that was studied. This study only analyzed the data between the years of 2010 and 2018, which caused some limitations within the research due to the way some of the data is reported. Another way to take this study further, would be to apply the same analysis to individual states in the United States data and compare those finding to other states. Lastly, testing other variables such as education levels. More specifically, study individuals who have achieved graduate level degrees verses people have just a high school degree. This would all be great information to study, to further this research on human capital migration.

Bibliography  

Bildirici, Orcan M, Sunal M, Aykac S, Elcin (2005). Determinants of human capital theory, growth and brain drain; an econometric analysis for 77 countries Applied Econometrics and International Development. AEID. Vol. 5-2 (2005). http://www.usc.es/economet/reviews/aeid526.pdf.

Census Bureau. “Income”. United States Census Bureau. Accessed April 26, 2019. https://www.census.gov/topics/income-poverty/income/data.html

Census Bureau. “Employment”. United States Census Bureau. Accessed April 26, 2019. https://www.census.gov/topics/income-poverty/income/data.html

Census Bureau. “Population”. United States Census Bureau. Accessed April 26, 2019. https://www.census.gov/topics/population/data.html

Chang, Shirley L. “Causes of Brain Drain and Solutions: The Taiwan Experience.” Studies in Comparative International Development 27, no. 1 (Spring 1992): 27. doi:10.1007/BF02687103.

George J. Sefa Dei, and Alireza Asgharzadeh. 2002. “What Is to Be Done? A Look at Some Causes and Consequences of the African Brain Drain.” African Issues 30 (1): 31. doi:10.2307/1167087.

Heery, Edmund, and Mike Noon. “Brain Drain [Human Capital Flight].” A Dictionary of Human Resource Management, 2017. doi:10.1093/acref/9780191827822.013.2023.

Ibid. and David Ihrke, “United States Mover Rate at a New Record Low,” U.S. Census Bureau, Census Blogs, January 23, 2017, https://www.census.gov/newsroom/blogs/random-samplings/2017/01/mover-rate.html, accessed July 25, 2018.

Rotte, Vogler M. (2000), “The Effects of Development on Migration: Theorectical Issues and New Empirical Evidence”, Journal of Population Economics. 13(3), 485- 508

Quinn, Zack. “Waiting in line: Why legal immigration can take decades”. Cronkite News. https://cronkitenews.azpbs.org/2016/11/28/waiting-turn-long-line-legal-immigration/

U.S. Census Bureau, Geographic Mobility: 2005 to 2010. December 2012, Table 2, https://www.census.gov/prod/2012pubs/p20-567.pdf, accessed April 19, 2019

World Bank. “World Development Indicators.” The World Bank Group. Accessed April 26, 2019. http://datatopics.worldbank.org/world-development-indicators/

Appendix

Table 1: Data Defines

Population:

“All people, male and female child and adult, living in a given geographic area.” – (U.S. Census Bureau)

Unemployment Rate:

“Represents the number of unemployed people as a percentage of the civilian labor force.” – (U.S. Census Bureau)

Wage Index:

This is also known as Income Index. “GNI per capita (2011 PPP International $, using natural logarithm) expressed as an index using a minimum value of $100 and a maximum value $75,000.” – (World Bank)

Per Capita Income:

“Mean income computed for every, man, women, and child in a particular group. It is derived by diving the total income of a particular group by the total population.” – (U.S. Census Bureau)

Average Life Expectancy:

“An index using a minimum value of 20 years and a maximum value of 85 years.” – (World Bank)

Education Index:

“An average of mean years of schooling (of adults) and expected years of schooling (of children), both expressed as an index obtained by scaling with the corresponding maxima.” – (World Bank)

Human Development Index:

“A composite index measuring average achievement in three basic dimensions of human development – a long and healthy life, knowledge and a decent standard of living.” – (World Bank)

Net Rate of Migration:

“Net Rate of migration is the net total of migrants during the period, that is, the total number of immigrants less the annual number of emigrants, including both citizens and noncitizens. Data are five-year estimates.” – (World Bank)

Table 2: Multiple Regression for Each Model

F

Value

R

Square

Y Intercept

P-Value

Unemployment Rate

Wage Index

Per Capita Income

Average Life Expectancy

Education

Index

Human Development Index

Net Rate of Migration

Migration Model

334.83

.997

1734296496.48

0.16

.28

.07

.07

Human Capital Model

3019.05

.999

526630948.21

.00

.94

.01

Growth Model

218.04

.988

371149886.36

.05

.87

#NUM

[1] Heery, Edmund, and Mike Noon. “Brain Drain [Human Capital Flight].” A Dictionary of Human Resource Management, 2017. doi:10.1093/acref/9780191827822.013.2023.

[2] Chang, Shirley L. “Causes of Brain Drain and Solutions: The Taiwan Experience.” Studies in Comparative International Development 27, no. 1 (Spring 1992): 27. doi:10.1007/BF02687103.

[3] Heery, Edmund, and Mike Noon. “Brain Drain [Human Capital Flight].” A Dictionary of Human Resource Management, 2017. doi:10.1093/acref/9780191827822.013.2023.

[4] Heery, Edmund, and Mike Noon. “Brain Drain [Human Capital Flight].” A Dictionary of Human Resource Management, 2017. doi:10.1093/acref/9780191827822.013.2023.

[5] Chang, Shirley L. “Causes of Brain Drain and Solutions: The Taiwan Experience.” Studies in Comparative International Development 27, no. 1 (Spring 1992): 27. doi:10.1007/BF02687103.

[6] Chang, Shirley L. “Causes of Brain Drain and Solutions: The Taiwan Experience.” Studies in Comparative International Development 27, no. 1 (Spring 1992): 27. doi:10.1007/BF02687103.

[7] George J. Sefa Dei, and Alireza Asgharzadeh. 2002. “What Is to Be Done? A Look at Some Causes and Consequences of the African Brain Drain.” African Issues 30 (1): 31. doi:10.2307/1167087.

[8] Bildirici, Orcan M, Sunal M, Aykac S, Elcin (2005). Determinants of human capital theory, growth and brain drain; an econometric analysis for 77 countries Applied Econometrics and International Development. AEID. Vol. 5-2 (2005). http://www.usc.es/economet/reviews/aeid526.pdf.

[9] Rotte, Vogler M. (2000), “The Effects of Development on Migration: Theorectical Issues and New Empirical Evidence”, Journal of Population Economics. 13(3), 485- 508

[10] Ibid. and David Ihrke, “United States Mover Rate at a New Record Low,” U.S. Census Bureau, Census Blogs, January 23, 2017, https://www.census.gov/newsroom/blogs/random-samplings/2017/01/mover-rate.html, accessed July 25, 2018.

[11] Bildirici, Orcan M, Sunal M, Aykac S, Elcin (2005). Determinants of human capital theory, growth and brain drain; an econometric analysis for 77 countries Applied Econometrics and International Development. AEID. Vol. 5-2 (2005). http://www.usc.es/economet/reviews/aeid526.pdf.

[12] Bildirici, Orcan M, Sunal M, Aykac S, Elcin (2005). Determinants of human capital theory, growth and brain drain; an econometric analysis for 77 countries Applied Econometrics and International Development. AEID. Vol. 5-2 (2005). http://www.usc.es/economet/reviews/aeid526.pdf.