Economic Systems and Emerging Markets Internationally

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Map showing regional variation in European GDP (PPP) per capita in 2006. Figures from International Monetary Fund (Photo credit: Wikipedia)

File-Average GDP PPP per capita (Photo credit: Wikipedia)

Peru’s economic activity in the 1970s (Photo credit: Wikipedia)

English: en:Purchasing power parity. Similar to Image:PPP2003-World-Borders.png, but uses a different data set. CSS for country coloring generated by en:User:Doodle77/PPP2003-php. (Photo credit: Wikipedia)

World map showing 2007 estimates about GDP (PPP) per capita (international dollars) {| style=”width: 100%;” |- style=”vertical-align: top;” | style=”width: 100%;” | |} —- (Photo credit: Wikipedia)

English: (Photo credit: Wikipedia)

Under Atatürk economy advanced from state based polices to mixed economy aligned with the increase in the capital in the society (Photo credit: Wikipedia)

GDP (PPP) Per Capita based on 2008 estimates http://www.imf.org/ (Photo credit: Wikipedia)

English: GDP PPP per capita of Argentina, Brazil, Chile and Mexico (source), as a percentage of the average GDP PPP per capita for Latin America (source) in a given year. (Photo credit: Wikipedia)

Country Resources are allocated using an Economic system. Here are some of the basic paradigms associated with the basic types of economic systems that a country can use to allocate resources and conduct commercial activities: 

A.  Centrally Planned Economy is an economic system where decisions about resource allocation and commercial activity are made by central planners.It aims to improve productivity and to achieve political, social, and economic objectives by controlling the production and distribution of resources.Group welfare is considered more important than individual well-being and the system strives for economic and social equality.

B.  A  Mixed Economy  is an economic system where the government works with the private sector to allocate resources and make decisions about commercial activity. This system has some of the characteristics of a market economy with more regulatory oversight in some sectors, including state-run enterprises. The government frequently controls economic sectors that they consider to be important to national security and stability.

Chart of economic growth; from spreadsheet (Photo credit: Wikipedia)

Economic resources like land and factories are more equally split between private and government ownership with generous welfare systems and access to health care.  This economic system strives for:  low unemployment and the reduction of poverty with more of an equitable distribution of income. Historically, government ownership has often led to less efficiency and innovation. This has generated a gradual move toward Privatization: selling government-owned economic resources to private companies and individuals.

Here’s a video to watch: https://www.youtube.com/watch?v=B3u4EFTwprM

In a market economy, the government enforces Antitrust Laws to encourage competition and prevent monopolies that constrain commerce.

Another important concept is Economic Development; measuring the economic well-being of one nation’s people relative to the residents of another nations.

It reflects the following measures:

1. economic output (agricultural and industrial);

2. infrastructure (power and transportation facilities);

3. physical health

4. level of education.

Countries are often compared based upon gross national product per capita. To effectively compare gross product per capita, each currency must be translated into a single currency. Official exchange rates do not show what the local currency can buy in the home country.

politics – Clint’s Nolan Chart – 20020718 – slightly inaccurate but good (Photo credit: Rev. Xanatos Satanicos Bombasticos (ClintJCL))

“Purchasing power parity is the relative ability of two countries’ currencies to buy the same “basket” of goods in those two countries.” Pearson IB Text

The 10 countries with the highest military expenditure in 2007 in market exchange rate terms and purchasing power parity terms (Photo credit: Wikipedia)

The Human development index (HDI) measures “extent to which a people’s needs are satisfied and the degree to which these needs are addressed equally across a nation’s entire population along three key dimensions: a long and healthy life, an education, and a decent standard of living.” Pearson IB Text

The United Nations Human Development Index (HDI) rankings for 2011. For full details, see List of countries by Human Development Index (en.wikipedia) Very High High Medium Low Data unavailable (Photo credit: Wikipedia)

Moving to a market economy generally involves painful reforms including: state-owned enterprises must be privatized. Barriers to trade and investment must be minimized and currency convertibility issues must be resolved.

Singapore (Photo credit: Christopher Chan)

Transition is expensive because infrastructure investment is imperative and financial institutions must be created.

Another interesting video: https://www.youtube.com/watch?v=AULJlwoI3TI