BUS 626 W5D2

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Ashford University *

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626

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Economics

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Jan 9, 2024

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Upon looking at the data and visuals depicted in chapter 17, what I found most interesting was how geography played a crucial role in development. in Exhibit 1, we see a graph that highlights GDP per capita of high income countries, developing countries, and sub-saharan Africa (Gwartney et al, 2022, pg 336). A baseline analysis can highlight 2 big development points in history: the Industrial Revolution in the 1820s and the information/technology age that started in the 1950s/1960s. Those that had better geographical advantages had more benefit from the Industrial Revolution than those whose geography did not supply them with easy access to bigger markets. Even during the information and technology age over a century later, all 3 groups benefited, but still those held the geographical advantage saw a larger exponential increase (Gwartney et al, 2022, pg 344). It is hard to say whether rich countries are getting richer while poor countries are getting poorer. Within the past 50 years, cheaper access to trade and more access to information has benefitted countries across the globe. While high income countries experienced rates of higher exponential growth, developing and sub-saharan African countries have seen a growth in international trade as a portion of their GDP (Gwartney et al, 2022, pg 344). While the United States is ranked as the 25th freest economic country in the world, the economic freedom is on the decline. Economic freedom can be measured through pillars including: rule of law, government size, regulatory efficiency, and open markets. While open markets and regulatory freedom are strong, recent increases in size of the federal government and the amount of spending has threatened more economic freedom. Increases in U.S. debt and inflation threatens the future growth of the U.S. (Heritage Foundation, 2023). As we learned from our previous readings, there are only so many levers that can be pulled to impact the economy (monetary and fiscal levers). Political decision-making will directly impact that fiscal lever. Depending upon policies that are implemented, this will directly effect the size and spending of the federal government. The more unchecked deficit spending that occurs, the more the economic livelihood for the U.S. will be up in the air and future will be at risk. Resources Gwartney, J. D., Stroup, R. L., Sobel, R. S., & Macpherson, D. A. (2022). Macroeconomics: Private and public choice (17th ed.). Cengage Learning. The Heritage Foundation. (2023). United States Economy: Population, GDP, Unemployment, Inflation, Spending . Www.heritage.org. https://www.heritage.org/index/country/unitedstates#:~:text=The %20United%20States

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