Discuss about the Investment in Australian Economic Development.
The particular article highlights several issues regarding the money and the price level. The author has discussed the capital in a fragmented economy. The linearization and the capital market have been discussed in the paper in an appropriate manner. On the other hand, the author has also analysed the invention syndrome including self-finance and distribution of the income, unemployment and the factor proportions and the tax-subsidy solution based on different events (McKinnon 2010). With the involvement of the monetary theory, the author has identified the neoclassical approach and the biased on the inflation. The author has also sketched the successful financial growth and monetary reform of Germany and Japan from 1953 to 1970.
In some countries, the economic wealth is quite high or rising; whereas the other countries have become languish. There are several differences among the countries in some of the particular areas including cultural heritage, colonial experiences, natural resources, and the political structure (Frank and Freeman 2014). In this particular article, the author has highlighted the fact that the industrial development is one of the key factors that enhances the country’s economic growth in an effective manner. Sometimes, the fragmented industry plays a major role in the economic development of the country (Blomstrom 2014). The article highlights the theory of the economic development, which is very different from the different stages of the growth. The author has suggested a bootstrap approach where the successful development depends largely on the policy choices approached by the national authorities of the developing countries (Bos, Sanders and Secchi 2013). The theories utilised in the article demonstrate the process of freeing the domestic financial markets. Consequently, it allows the interest rates to reflect the accurate insufficiency of capital in the developing economies. The author has focused on the monetary theory that suggests the relation between money and the physical capital. It indicates the policy implications of the government to overcome the inflation and stagnation from the national economies. For example, the author has sad that the success or the failure of some countries including South Korea, Taiwan, Brazil depends on their decision in the monetary sector (Coale and Hoover 2015).
In the article, the author has utilised the secondary research method for analysing the research topic of money and capital in the economic development. The secondary research method is an appropriate process for evaluating different data and information on the research topic (Martinussen 2015). The research topic is centralised at rules and regulation of different monetary policy. Hence, there was a huge requirement for accumulating vast information on the research topic for analysing the research in an effective manner. Hence, different trusted sources like books, journals and websites are the best sources for accumulating information on the research topic. On the contrary, the primary research is not appropriate for this particular topic, as it is focused on country’s economic development (Lockwood 2015). Consequently, the author needed to accumulate different information on the world economies, which cannot be gathered by executing the primary research activity.
In this particular article, the author has explained and examined the monetary theory. The author has highlighted the fact that monetary theory indicates the relation between the money and the physical capital. However, different governmental policies have been implemented into the national economies due to overcoming the inflation and stagnation (Dobb 2012). The author has also provided the example where the primary success depends on the preliminary steps taken by the government. However, these steps need to be taken based on the monetary theory. The particular paper highlights the rules and legislations on the monetary policy of the countries. The author has also focused on the industrial development and its impact on the national economies (Butlin 2013). On the other hand, the author has also discussed the effect of monetary reform on the development. Most of the time, the monetary reform facilitates in the development measures including tariff and tax, or the influence of the foreign capital investment.
The author has highlighted the fact that monetary policies have been contributing national economic success to the different countries like Japan, Mexico and Colombia. On the other hand, the author has suggested the “bootstrap” approach, which largely depends on the policy made by the national authorities in the developing countries (McKinnon 2010). The developing country will focus on reducing the low productivity activities. The author has centralised his analysis on the monetary theory. On the other hand, the impacts of the monetary policy on the national economies have been demonstrated in the paper.
By analysing the article, it can be assessed that the author has tried to evaluate the impact of the fragmented economies on the nation. Moreover, the importances of the high rates of interest have also been highlighted in the paper. Due to the high-interest rates in the business, most of the time, the nation face challenges in capturing the foreign investment (Liedholm and Mead 2013). Consequently, these countries are unable to strengthen their economic structure in an efficient manner. The author has also focused on the semi-industrial LCDs. It indicates that some of the countries have made more or less autonomous efforts in developing the economic structure of the nation. For example, Japan has done better economic development in compared to India. Moreover, Mexico and Taiwan have also better industrial growth than Colombia and Philippines respectively (Butlin 2013). Hence, it can be assessed that the industrial developments have played a major role for these countries to experience better economic development. The author has also indicated the impact of the financial transformation of the national economies. For example, in 1965-66, Korea has experienced the financial transformation (Portney 2013). It has facilitated them in implementing the monetary policies in the national economic structure. On the other hand, the fragmented economies have been created challenges for economic development. In this particular article, the author has also highlighted the capital theory, which includes the decision making the approach in a fundamental method.
Blomstrom, M., 2014. Foreign Investment and Spillovers (Routledge Revivals). Routledge.
Bos, H.C., Sanders, M. and Secchi, C., 2013. Private foreign investment in developing countries: a quantitative study on the evaluation of the macro-economic effects (Vol. 7). Springer Science & Business Media.
Butlin, N.G., 2013. Investment in Australian economic development, 1861-1900. Cambridge University Press.
Coale, A.J. and Hoover, E.M., 2015. Population growth and economic development. Princeton University Press.
Dobb, M., 2012. Soviet economic development since 1917. Routledge.
Frank, R.H. and Freeman, R.T., 2014. Distributional consequences of direct foreign investment. Academic Press
Liedholm, C.E. and Mead, D.C., 2013. Small enterprises and economic development: the dynamics of micro and small enterprises. Routledge.
Lockwood, W.W., 2015. Economic development of Japan. Princeton University Press.
Martinussen, J., 2015. Society, state and market: A guide to competing theories of development. HSRC Publishers.
McKinnon, R.I., 2010. Money and capital in economic development. Brookings Institution Press.
Portney, K.E., 2013. Taking sustainable cities seriously: Economic development, the environment, and quality of life in American cities. MIT Press.