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What are the different types of economies
command, mixed, market
What is the importance of economic environments
estimate how market trends and government policy influence the performance of their companies
What are the various conditions that hamper the development of indicators for country evaluation
stipulating a definitive set of indicators to estimate the peformance of a country’s economy, today’s set of perfect measures may be imperfect tomorrow, interdependencies complicate interpreting the relationship among elements of the economic environment, official figures can be misleading due to shadow economy
What does the economic development level show
current market potential and conditions
What does the economic development rate of change show
future market potential and conditions, possible first-mover advantages
What drives economic growth and development
activity of private firms, conducive business environment to develop innovations and deploy entrepreneurship, government role, economic, political and legal systems which are attractive
What drives economic growth and development - activity of private firms - short term
firms mobilise productive resources
What drives economic growth and development - activity of private firms - long term
firms generate technological change including products, services, processes, strategies, organisations, management practices
What drives economic growth and development - conducive business environment to develop innovations and deploy entrepreneurship
market economy, price mechanism, strong property rights
What drives economic growth and development - government role
to create conducive preconditions although preventing excesses of market economy
What are the means of economic transition
liberalising economic activity, reforming business activity, establishing legal and institutional frameworks, how well the government deals with issues
What are the means of economic transition - how well the government deals wit issues including
privatisation, regulation, property rights protection, fiscal and monetary reform, antitrust legislation and competition policy
What are the different indicators
lagging and leading
What are the lagging indicators
economic growth, inflation, government debt, income distribution, labour force and unemployment, interest rates, profit reports
What are the leading indicators
confidence indexes, financial market indexes, trade indexes, investment indexes, housing and construction indexes
Implications for business - economic growth
change in profit, future investment
Implications for business - inflation
value of future revenues and input costs
Implications for business - government debt
potential tax increases, future interest rates
Implications for business - income distribution
size of customer base, security risks, base of pyramid opportunities
Implications for business - labour force and unemployment
labour costs, price competitiveness
Implications for business - interest rates
cost of capital, return on capital
Implications for business - profit reports
business conditions, appetite for future investment
Implications for business - confidence indexes
investment expenditure, consumer spending, business start up
Implications for business - financial market indexes
return on invested capital, capiutal raising, cost of raw materials
Implications for business - trade indexes
volume and cost of trade, future growth
Implications for business - investment indexes
supply orders, current inventories, expected future investment, future sales and prices
Implications for business - housing and construction indexes
asset prices, debt levels, rental costs
Confidence indexes example
consumer sentiment, business outlook
Financial market indexes example
share, bond, community
Trade indexes example
Baltic dry index, global competitiveness
Housing and construction indexes example
median house prices
What are the shortcomings of GDP
no account of non-makret household production, no account for quality of life, does not measure informal market acitvities, per capita aerage takes no account of income inequality
Who were part of the BRICS
Brazil, Russia, India, China and South Africa
What were the BRICS growth supportive policy settings
macro stability, strong and stable institutions, openness, high levels of education
What happened to BRICS
Russia, Brazil and SA experienced volatile growth over the past decade, China had a sharp slowdown in 2024, India has had solid growth except during Covid
What is the biggest issue in BRICS
corruption
What does inflation due
either a cost push or a demand pull will increase prices which will have an effect on the cost of living, exchange rates and uncertainty, if there is a hard landing, there will be declining price which leading to declining profit, then unemployment, then declining demand and back to declining price
What does the high debt levels increase the risk of
higher future taxes, reduced government expenditure, higher future interest rates, reduced consumer spending
What is the indicator for income inequality
gini coefficient
What are the dimensions of economic freedom
rule of law, government size, regulatory efficiency, open markets
What are the dimensions of economic freedom - rule of law
property rights, judicial effectiveness, government integrity
What are the dimensions of economic freedom - government size
tax burden, government spending, fiscal health
What are the dimensions of economic freedom - regulatory efficiency
business freedom, labour freedom, monetary freedom
What are the dimensions of economic freedom - open markets
trade freedom, investment freedom, financial freedom
