The global economy has faced many challenges in recent years, from health issues to income inequality, trade restrictions, unemployment and gender inequality, to name a few. In this article, we’ve extracted some thought-provoking chapters from recent headlines that address the central issues facing economics today, while also touching on some possible improvements.
Reform health care
“We [the United States] I like to think that we have the best health care system in the world, and in some ways we do. Our doctors and hospitals use cutting-edge technology, and we are a world leader in pharmaceutical innovations and the treatment of heart disease, hypertension, cancer and other major diseases. But too many people do not have health insurance, which damages their health and leads to economic hardship. And our costs are too high. Health spending has been increasing for several decades and, counting both public and private spending, we spend far more than any other country with little difference in health outcomes. Slower spending growth would free up resources for other uses, which would help the economy grow faster, raise wages and raise living standards. –William Gale, author of Tax therapy. Read a free chapter online here.
The problem of income inequalities
“The standard of living only changes according to the GDP per capita if the distribution of income is unchanged. If incomes become less equitably distributed, the standard of living of most people will decline even if the GDP per capita is stable. The Gini coefficient is the most widely used indicator to measure income distribution. Inequality in the UK, on this measure, has increased since 1977, stabilized since 1987 and declined in recent years. In the United States, there has been a long-term increase in income inequality. Unless this American trend of increasing income inequality stops, it is highly likely that even if the GDP per capita increases in the United States, the standard of living of the average voter will decline. Recent data suggests that changes in income inequality are less of a threat to living standards in the UK than they are in the US. -Andrew Smithers, author of Productivity and bonus culture. Read a free chapter online here.
Restrictions on free trade
Free trade offers enormous benefits to developing countries. The author of the book Free trade and prosperity Arvind Panagariya, offers a strong defense of policies favorable to free trade and their benefits for developing countries. Through cross-national evidence and detailed case studies, Panagariya demonstrates the need for trade openness for sustained growth and poverty reduction. He explains how openness has been the key to economic success in many countries like Singapore, Taiwan, South Korea, China and India. Low or falling barriers to free trade and high or increasing shares of trade in total income have been key elements of sustained rapid growth and poverty reduction in these and many other countries. Free trade is like oxygen: the benefits are everywhere and go unnoticed until they are gone. Learn more about this book here.
“It is clear that over the past fifty years, industrialization has been a key driver of economic growth and structural transformation in most of the 14 Asian countries. This role has acquired even greater importance over the past quarter of a century. Economic openness has played an essential supporting role in the process, wherever it has been in the form of strategic integration rather than passive integration into the global economy. The leading role of governments, as catalysts or leaders, has been the basis of the success of industrialization. This success, although uneven depending on the country, has been remarkable. It would have been difficult to imagine in 1950, or even in 1970. In retrospect, this experience of industrialization of Asia is often cited by academics, with opposing ideological opinions, in support of their visions of the world. It should be emphasized that the following normative generalizations, often simplistic, are misleading. The most important lesson from the Asian experience is that there is no magic wand: whether it is markets and openness or state intervention and controls. The paths to industrialization varied, and the recipes for success were unique to each country. -Deepak Nayyar, author of Renaissance Asia. Read a free chapter online here.
“The public measures the strength of the economy by the strength of the labor market, and many fear and suffer from the problems in our labor market. For several years after the 2008 crisis, wages for much of the workforce stagnated and new and better job creation was slow. Many have left the workforce in discouragement. Others worked for bad bosses in boring or worse jobs. Still others have worked more than one job to make ends meet. In the 1960s, we were hoping for flying cars and cancer cures. Both took a long time to arrive. Both GDP and productivity growth rates have declined. Americans don’t realize how rare it is in human history to expect each generation to do better than the last. Some have started to lose this expectation. This makes them unhappy, because hope for a better future is an important determinant of current happiness. -Arthur M. Diamond, Jr., author of Openness to creative destruction. Read a free chapter online here.
Gender equality in management positions
“Women make up 50 percent of the world’s population and 40 percent of labor market participants, but they are seriously under-represented among business and political leaders. Only 19 percent of companies have female senior managers and 23 percent of seats in national parliaments are held by women. 1. In the United States, women make up only 18% of directors and 5% of CEOs of large companies. Fewer than one in five members of the United States Congress is female, and the country has yet to elect a female president.
Although senior leaders themselves represent a tiny fraction of the population, their remaining predominantly male is, at a minimum, a matter of symbolic significance. This shows that despite decades of educational and labor market progress, both in absolute terms and relative to men, women have not achieved parity in workplace outcomes. job. -Amalia R. Miller, associate of The Oxford Handbook on Women and the Economy. Read a free chapter online here.
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