Economic Indicators Analysis, Essay Example

The country of economic indicator for this discussion is Albania. The savings/investment rate/gross capital formation is 24.6% of GDP for the period 2000-2004. Assume k = 3 in the Harrod-Domar model. An increase of 3% in 2001 implies a certain agriculture growth rate in 2002. Then in 2002, a tremulous increase of 2.8% growth rate in 2003 because of agriculture industry was accounted for the increased job market and exporting businesses. From there in 2004, a small growth aggregate rate of 2% carried over from the year of 2003. A declining investment savings decreased 4% because of the valuation of the dollar became weaker due to the fiscal and legislative reforms and foreign exchange affairs. Thus, the exporting businesses restricted the number of exports. The GDP growth rate actually grew in 2001-2005 are between 12 % – 15% respectively. The difference in savings in 2000 to 2001 was between 2% to 4% because of the unemployment rate was around at 13% during the time. The major factor of the savings was the farming operating businesses operated by families other than established companies in the agriculture sector.  Other industry sectors were to follow the customs of collectivism characteristics in which distributes the conflict, corruptions, and genocides in the government entity preventing from taking off the infrastructure plan at the third stage of economic development. The country of Albania’s economic trends during these years has obviously rejected the support of the Harrod-Domar model because there is no strong significance of marginal difference in capital output of savings and investments. To the extent, the development to Rostow model –The Stages of Economic Development extended that Albania did not pass the taking off stage, which is necessary for the exporting infrastructure to support the trade with developing countries.

The GNI per capita, PPP for the country of Albania is $27,160 Billion and the GNI per capita, PPP for the country of Canada is $154,590 Billion in total of five years. The real GDP per capita in 2000 for Albania is $4,380 and $27,670 for Canada. The average growth rate for Albania is 3.5% and, 24.6%. This compared to the Canada’s growth rate is 4.3% and, 26.4% respectively. Solow model predicts the average growth rate of 7.0% for Albania as the computation showed that =  =7.0, thus the investment rates equals to the savings rates annually.  Whereas, Canada average growth rate is 6.1%.  The computation for Canada showed that   = 6.1% of average growth rate. In despite of Albania’s higher growth rate in their middle-income level development, they do need expansion in private sectors than Canada’s high-income level development private sectors.

The bad equilibrium in the aspects of labor economy is by the means of human labor rights. The labor law policy in the low to middle level developing countries have the tendency to not to create a formation to modern day industry. For instance, taxing out farming businesses or require remittances from them to cover at least part of the investment in human capital. Another example is that professionals with sustainable income cannot reflect their true social value including externalities. As mentioned above that Albania has at least 13% of unemployment rate. In order to bring the good equilibrium is to increase the efficiency in the world output and increase the divergence of income between low-income and high-income countries. The government of Albania is currently expanding on the water infrastructure and is connecting to adjacent neighboring countries. Thus, there is a good chance that Albania is building a good equilibrium.