Free Term Paper About Economics
Thailand is a developing country and is struggling in order to achieve a remarkable growth. The recent growth experience of Thailand can be analyzed from the standpoints of the growth models such as Lucas Growth Model and Solow growth Model. The economic growth of the country can be considered from various microeconomic variables such as GDP, GNP, and GNI, ect. If we analyze the data of the country from the year 2007-2009 then it can be seen from the indicators that the country is not making significant progress. The indicators such as gross capital formation, GDP Per capita growth rate, GNI, Gross domestic savings, gross fixed capital formation, labor force participation rate, labor force with primary education, labor force with secondary education, GDP per capita. GNI per capita, gross national expenditure, investment in energy, telecom, water, sanitation, and transport, school enrollment rate at the primary, secondary, and tertiary level have not shown any remarkable improvement as indicated in the Table 1 of Appendix.
The Solow Growth Model describes that the growth is achieved by adding more labor, capital, and technology in the economy (Acemoglu). The Solow Model is of the view that the sustained increase in the capital investment paves the way to the increase on the growth rate because of the increase in the capital to labor ratio. In the case of Thailand, the company is not making significant improvements in the capital formation, labor, and technology, as a result of which the country is unable to achieve the growth of the economy. Table 1 in Appendix shows that there is no significant improvement in the Gross capital formation in terms of the percentage of GDP was 26.4 in the year 2007, which has increased to 29.2 in 2013 indicating no notable improvement. Further, the labor force participation rate as a percentage of the total population ages 15-64 was 78.5 that remained almost same to about 78.3 in the year 2013, showing no improvement. Further, the country has not made enough investment in transport, water, and telecom to ensure technological improvement. As a result of which the country failed to achieve the desired growth, which can be analyzed from the GDP growth, and GDP per capita growth. Thailand even failed to make achieve any significant improvement in the GDP growth. It can be seen from the Table 1 of Appendix there is no notable progress in the GDP PPP constant and even in GNI, i.e., Gross National Income. The country can make improvements by making investments in the capital and technology. By investing in the capital and technology and ensuring more participation of the labor force the country can achieve desirable growth in the gross domestic product or GDP, which further paves the way to the growth of the country as a whole. Further, the country has to increase its saving rate for making progress and achieving growth. he Solow Model indicates that the saving rate of developed countries is more as compared to the saving rate of the developing countries. The developing countries such as Thailand has to increase the labor force participation so that output per worker can be improved that can pave the way to further capital formation, and growth of the country.
Further, the Lucas Model explained that the accumulation of the human capital paves the way to increase in the productivity of the capital and labor (Ros). However, human capital can be achieved in a country by imparting education to people, and improving their skills that help them to do their work in an effective manner (Akinyemi). Since, all the labor is not similar or equal so the quality of labor force can be increased by investing on them. However, economic value is associated with the experience, skills, abilities, and the education of the employees for the employees as well as for the whole economy. Considering Thailand, the country is not making enough investments for the formation or accumulation of the capital. The capital formation of the country is low. Moreover, the country increased the expenditure on the primary, secondary, and tertiary education level in order to improve the human skills, but still the enrollment rate of the students at the primary, secondary, and tertiary level is low. It can be seen from the Table 1 of the Appendix that the school enrollment at primary, secondary, and tertiary level is low. Since, most people are going to the schools so it is becoming difficult for the country to deliver and improve the human skills, as a result of which the productivity of the labor as well as physical capital is low in the country. The country should ensure increase in the enrollment arte so that human skills can be improved that can further improve the productivity, and ultimately lead to the progress of the country.
In a nutshell, Thailand has to make investment in the technology, capital, and in education so that the labor force become capable of doing more work, which can increase output per worker of the employees, the GDP will increase, and the country can increase its growth.
Acemoglu, Daron. Introduction to Modern Economic Growth. Princeton: Princeton UP, 2009. Print.
Akinyemi, Samuel. Economics of Education. Houston, Texas.: Strategic Book, 2013. Print.
Ros, Jaime. Rethinking Economic Development, Growth, and Institutions. New York: Oxford UP, 2013. Print.
World Development Indicators." The World Bank. Web. 24 Feb. 2015.
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