Analysis of Economies Based on Data Into Stage 1, 2 and 3

Analysis of Economies Based on Data Into play 1, 2 and 3Indranil DharAnalysis of economies based on information into Stage 1, Stage 2 and Stage 3Based on World Economic Forums Global Competitiveness Report 2014/20151. And the entropy provided in the spread sheet, the countries sight be divided intoFactor compulsive Economies (Stage 1)2Efficiency Driven Economies (Stage 2)3 purpose Driven Economies (Stage 3)4This distinction is primarily based upon gross domestic product per Capita as tumesce as share of exports of mineral goods in total exports.5Stage 1 Factor Driven EconomiesVietnamMyanmarNicaraguaTransition from Stage 1 to Stage 2BotswanaStage 2 Efficiency Driven EconomiesThailandTunisiaTransition from Stage 2 to Stage 3CroatiaMauritiusStage 3 Innovation Driven EconomiesGreece because Competitive tycoon of a dot 1 economy can be calculated as follows= 0.6(Factory Driven Economies) + 0.35(Efficiency Driven Economies) +0.05 K- which is a constant for Innovation Driven Economi es)Hence Competitive index of a stage 2 economy can be calculated as follows= 0.5(Factory Driven Economies) + 0.45(Efficiency Driven Economies) +0.05 K- which is a constant for Innovation Driven Economies)Hence Competitive index of a stage 3 economy can be calculated as follows= 0.2(Factory Driven Economies) + 0.5(Efficiency Driven Economies) +0.3 K- which is a constant for Innovation Driven Economies) here(predicate) 1st Pillar Institutions (25%)Intellectual property protectionBurden of Government regulation here 2nd Pillar Infrastructure (25%)Quality of Overall InfrastructureHere 3rd pillar Macroeconomic environment (25%)Gross National Savings as a % of GDP( Here since all the parameters are in range of 1-7 with 1 being worst and 7 being best, I have modified the info within excel to showcase this( please refer Appendix A)Here 4th pillar Health and primary genteelness (25%)Quality of primary educationHence Factor Driven Economies = (Intellectual property protection+ Burden of Go vernment regulation)/2(25%) + Quality of Overall Infrastructure (25%) + Gross National Savings as a % of GDP (25%) + Quality of primary education (25%)Here 5th pillar Higher education and training (17%)Quality of maths and science educationHere 6th pillar Goods Market efficiency (17%)Trade Tariffs(Here since all the parameters are in range of 1-7 with 1 being worst and 7 being best, I have modified the data within excel to showcase this( please refer Appendix A)Here 9th pillar Technological Readiness (17%)FDI and technology assign (17%)Here Efficiency Driven Economies = (Quality of maths and science education (17%) + Goods Market efficiency (17%) + Technological Readiness (17%)) (Since information about other pillars are non present)We pull up stakes analyse the countries at each stage with regards to its short term appendage (up to 10-15 years) and long term growing (15-20yrs +) on the fundament of the competitive index at their respective stages and the competitive index of their next higher(prenominal) stage. If the competitive index of a realm at its own stage is high it content that the country is a counselling from its steady state and hence it pass on have short term growth prospects. Similarly if the competitive index of a country is higher at its next stage it means it is ready for the next take aim and hence it has long term growth prospects. This is off course field of operations to the condition that the current growth parameters at its current stage are at a satisfactory level.Analysis of Stage 1 economiesSince these are stage 1 economy the assumption here is more(prenominal) or little they have a similar production choke though convergence right may not apply as these countries are having different economic, cultural, geographical, historical backgrounds. As Stage 1 economies, the growth rate is heavily dependent upon bully assembly which in turn is dependent on high investment (savings rate). It will also depend upon primary edu cation, quality of infrastructure, labour, and health and primary institutions more than secondary education or trade barriers or technological innovation. It will also depend if the country has reached its steady state at that production function level and at what level of enceinte accumulation. Only if it shows sustained growth i.e. it is far away from its steady state and its primary factors( competitive index at stage 1) is high, it can be evaluated to check if can increase its production function to the next higher level for which more importance will past be given onto secondary education, trade barriers and technological advances( Competitive index 2). Also GDP growth of previous years gives a trend.Considering the above factors we can cogitate that Vietnam will grow the fastest within the next 10-15 years (short term). As it shows favourable stats it can progress to the next higher stage in the next 20 years.Myanmar on the other hand seems to have achieved steady state at a very less capital. Since the rate of investment is less and its primary factors such as education and infrastructure is less, its growth prospects are less. With a high trade barrier and less secondary education and lesser technological advances it cannot graduate itself to a stage 2 economy in the next 20 years.Nicaragua has similar statistics to that of Myanmar. However its primary education, quality of infrastructure is higher which suggests a higher growth prospect. Since its trade barriers are less and technological parameters are high, it has more chances of long term growth than Myanmar.Overall, the ranking on the basis of long term growth is as followsVietnamNicaraguaMyanmarAnalysis of Stage 2 economiesSince these are stage 2 economies, these will be more dependent on the next higher production function curve which is higher education, trade barriers, and technological advances. Off course investment in infrastructure, institutions, primary education and capital accumulat ion will still remain important though not as high as they were for stage 1 economies.Botswana seems to be leading the bunch up but because it is highly dependent upon minerals mainly diamond mining which have finite years and are subject to market speculations10, it will be bedded lower to that of Thailand due to the fact that it is lesser in secondary education and technology transfer. Thailand in fact can graduate to the next higher level in the next 20 years.Tunisia on the other hand due to its high trade barrier will have consistent slow growth rate at its current productivity levels and will not progress to the next higher level.Overall, the ranking on the basis of long term growth is as followsThailandBotswanaTunisiaAnalysis of Stage 3 economiesSince these are already stage 3 economies, the determinant factor will be their distance from steady state. And this will be dependant on high total factor productivity factors such as technological innovation, efficiency, human capi tal, trade barriers more than capital accumulation or primary education or quality of infrastructure unless there is a big issue with those parameters. The competitive index of stage 3 sums up the critical factors and based on that we can say Mauritius is having this highest growth prospect followed by Croatia and Greece.Greece is having a recession which can suggest in a way that it has reached its steady state. Since its technological and efficiency factors are not very high, it will struggle to grow in both short as well as long term.Overall, the ranking on the basis of long term growth is as followsMauritiusCroatiaGreeceConclusionBased on the above analysis, we can conclude that Vietnam is the most growing country whereas Greece is the least.The rankings are as followsVietnamThailandBotswanaNicaraguaMauritiusTunisiaMyanmarCroatiaGreeceIron Law of convergenceConvergence can only happen when the countries are similar in terms of geography, culture, history and other related parame ters.Countries that can be clubbed togetherVietnam, Thailand and MyanmarCroatia and GreeceMauritius and BotswanaIn the case of Vietnam, Thailand and Myanmar, Vietnam can catch up with Thailand in the next 20-30 years.Similarly, Croatia will catch up with Greece within the next 10 years.And finally Botswana will catch up with Mauritius within next 10 years.1 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf2 http//en.wikipedia.org/wiki/Global_Competitiveness_Report3 http//en.m.wikipedia.org/wiki/Global_Competitiveness_Report4 http//www.scribd.com/doc/154276062/National-Competitiveness-Report5 http//openaccesslibrary.org/images/ULV227_Mark_Loo.pdf6 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf7 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf8 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf9 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf10 http//www3.weforum.org/docs /WEF_GlobalCompetitivenessReport_2014-15.pdf11 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2014-15.pdf12 http//www3.weforum.org/docs/WEF_GlobalCompetitivenessReport_2013-14.pdf