EC501 International Economic Development Report 1 Sample
Assignment Details
Purpose
The purpose of this assessment item is to summarise current data on international economic development and develop commentary on its current state. It is important to use data that is as up to date as possible because there are almost always global and regional events that have significant impact upon international economic development. The Global Financial Crisis that ran from mid-2007 to early 2009 and the COVID pandemic of 2019 to 2021 are recent examples of major global events that had significant effects on international economic development.
The Task
Students should assemble data and charts that provide a detailed overview of the current status of international economic development. Data and charts should allow for comparison and contrast between the developed and developing economies. Although it is not necessary that students create original charts, where published charts are used, they should be appropriately acknowledged.
Data of particular interest in the context of international economic development includes trade, foreign aid, foreign direct investment, private capital flows, economic growth, incidence of poverty, and government budget outcomes. Broad indicators of human flourishing such as the Human Development Index or the Happiness Index might also be discussed.
It is not enough merely to present data and charts. A coherent commentary should also be provided. The commentary will demonstrate that you have a good grasp of what international economic development ‘looks like’ at the present time. This will provide a useful context for much of the unit.
Style Guide
You are required to use APA system for citations and reference lists. You can find a link to the Concise APA Handbook in this Moodle page.
Format
The format required for the case study is set out here. This format contains eight sections.
Cover Page (not included in word count)
• Title of the assessment
• Student name and student number
• Code and title of unit (EC501 International Economic Development)
List of contents (not included in word count)
• Provide a list of the headings you have used in your assessment, with page numbers
Executive Summary (around 200 words) (this is the last section to be written)
• Outline the purpose of the assessment
• Brief description of the key data
• Summarise the commentary developed in this assessment
Introduction (around 200 words)
• Define what is meant by the expression ‘international economic development’
• Describe briefly the data assembled for this assessment
• Summarise briefly the discussion to follow
Discussion (around 1,000 words)
• Present all the data and charts chosen for this assessment (tables and charts are not included in the word count)
• Provide a coherent commentary on the data and charts that creates a ‘picture’ of what international economic development ‘looks like’
• Reflection on learning that addresses the following:
o What was the most important thing that you learnt in writing this assignment?
o What did you find hardest to understand while writing this assignment?
o What is the most important question you hope to answer as you study this unit?
• This section is often divided into sub-sections
Conclusion (around 200 words)
• Provide a summary of the discussion to follow
• Highlight any areas that should be closely watched in the short to medium-term
References (not included in word count)
• You must use at least three references drawn from the Unit Outline for this unit. These may include books, journal articles and websites
• Make sure all references are cited correctly
Appendices (if any) (not included in word count)
• Attach a completed Checklist to Help Ensure Academic Integrity (download from this Moodle page)
• Attach any other appendix material such as web pages or spreadsheets
Solutions
Introduction
International economic development adheres to the process through which the economic well-being and life quality of a nation improve over time. This not only considers economic growth but also the equitable distribution of wealth, reduction in poverty, and enhancements in living standards and opportunities. In this assessment, data has been gathered from reputable sources such as the World Bank, International Monetary Fund (IMF), and United Nations. Higher prices can cause unpredictability in the economy which impacts both consumer and company investment. Policymakers must frequently strike a compromise between measures intended to reduce unemployment and efforts to control inflation, therefore it is imperative that they comprehend the dynamics of both inflation and unemployment. The lessons learnt from the epidemic will continue to impact social structures, economic tactics, and public health regulations in the upcoming years. Both collaboration and conflict were seen in the worldwide response to the epidemic. It will also focus on interpreting these data points to provide a coherent picture of current international economic development.
Discussion
Economic Growth and Trade
Global economic growth has shown signs of recovery after the disruptions caused by the COVID-19 pandemic. According to the IMF, the world economy is projected to grow by 3.5% in 2024. However, this growth is uneven, with developed economies rebounding faster than many developing countries. For example, the United States and the Eurozone have experienced robust recoveries, while several African and Latin American countries face slower growth due to weaker health systems and economic structures (Arif et al. 2022). Conversely, the Global Financial Crisis (GFC) that occurred between 2007 and 2009 was among the worst economic downturns since the Great Depression.
COVID 19 PANDEMIC
The new coronavirus SARS-CoV-2, which gave rise to the COVID-19 pandemic in late 2019, travelled quickly around the world and had a major negative influence on social, economic, and health issues. The United States was greatly impacted by the Global Financial Crisis (GFC) of 2007–2009 and the COVID-19 pandemic of 2019–2021, which had an effect on the healthcare system, social institutions, and the economy, among other areas. In October 2009, unemployment reached a peak of around 10% (Mühlich, Fritz, Kring & Gallagher, 2020). The economic downturn brought forth by the epidemic was severe but brief. In the second quarter of 2020, GDP shrank at an all-time high annual pace of 31.4%. Numerous companies, particularly small and service-oriented ones, were forced to close or suffer harsh limitations, which resulted in the irreversible loss of jobs in some industries. Perceived shortcomings in averting or suitably addressing the crisis led to a decrease in trust in financial institutions and the government for university assignment help.
By mid-2021, the epidemic had claimed over 600,000 lives in the United States, placing a burden on the healthcare system. The government enacted stimulus plans including the American Recovery and Reinvestment Act of 2009 (Yeyati & Filippini, 2021). Due to firms' inability to fund operations or growth and consumers' reduction in spending, this made the economic crisis worse. The Great Recession was brought on by the GFC, and the U.S. GDP shrank by 4.3% between the fourth quarter of 2007 and the second quarter of 2009.
Global Financial Crisis
The 2007–2009 Global Financial Crisis brought attention to weaknesses in the global financial system and emphasised the necessity of strict financial regulation and supervision in order to avert such crises in the future. In the United States, the COVID-19 epidemic had a deep and wide-ranging influence on many facets of life. Global health security was emphasised by international efforts in vaccine research and distribution, but geopolitical tensions—specifically, those pertaining to the virus's origin and handling—were also significant. Trade volumes have increased, with global trade expected to grow by 4% this year, according to the World Trade Organization (Ali & Mazal, 2022). However, ongoing geopolitical tensions, such as those involving China and the US, continue to impact trade patterns. The rise of regional trade agreements, such as the African Continental Free Trade Area (AfCFTA), highlights a shift towards more localized trade partnerships.
Inflation and Unmployment
The pace at which prices for goods and services generally increase and a currency's buying power declines is known as inflation. Central banks work to prevent deflation and restrict inflation in order to maintain a healthy economy. The same amount of money may purchase fewer products and services as prices rise (Tram & Ngoc Huy, 2021). These ideas are fundamental to macroeconomic policy and are frequently watched as measures of the state of the economy.
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Figure 1: Inflation Rate vs Unemployment rate
On the X axis we have the unemployment rate and on the Y axis the inflation rate. If unemployment increases, inflation decreases and vice versa, they are inversely related. The inflation rate increased by 4.0% annually as of May 2024, according to data as of mid-2024. Compared to earlier months of the year, when the rate ranged from 3.4% to 3.6%, this increase represents a little upswing. The housing industry accounts for 5.2% of this inflation, insurance and financial services for 7.8%, and alcohol and tobacco for 6.7%. The total inflation rate has increased as a result of the notable price rises in these industries (Haryanto, 2020). The most recent jobless statistics for May 2024 show a steady 3.6% rate of unemployment. Although there are differences in various locations and industries, this consistency is a reflection of the continued strength of the labor market. A key concept in macroeconomics is the link between unemployment and inflation, which is frequently shown as the Phillips Curve.
According to this theory, the rates of unemployment and inflation are inversely correlated. It showed that greater rates of inflation and lower unemployment rates were correlated. Pay tends to increase in the near term as unemployment declines because firms are competing for fewer people. Poverty reduction remains a critical challenge. According to the World Bank, the global extreme poverty rate is projected to fall to 8% by the end of 2024, although this varies widely across regions. Sub-Saharan Africa, in particular, continues to struggle with high poverty levels (Milanovic, 2022). The Human Development Index (HDI) reflects these disparities, with countries like Norway and Switzerland topping the list, while many African and South Asian countries lag behind. The Happiness Index further underscores these differences, often aligning with HDI rankings but also influenced by cultural and social factors.
Government Budget Outcomes
Fiscal policies have played a crucial role in economic recovery efforts. Many governments have allowed more spending to support their economies, leading to higher deficits and debt levels. The IMF is continuously warning potential fiscal challenges, particularly for countries with high debt-to-GDP ratios. Developing countries have faced constraints in fiscal space, limiting their ability to invest in essential infrastructure and services.
Supply Chain Demands
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Figure 2 : Supply chain demands
In many countries the epidemic significantly disrupted supply chain demand. Initially, there was a significant drop seen in AD and SRAS, which has increased unemployment and had conflicting impacts on inflation. Government budgetary initiatives have supported jobs and increased demand which created the adverse effects. With decrease in unemployment progressively, inflationary pressures became apparent as the economy recovered because of ongoing problems with the supply chain demand.
In the above diagram, the price and quantity of commodities in the X and Y axis are labeled. the aggregate demand curve is labeled as AD. E1 and E2 are the equilibrium points of demand and supply curve respectively. The pandemic had major effects on unemployment and inflation rates, which are examined through the use of aggregate supply and demand curves. Lockdowns and other limitations in the early phases of the epidemic has created a sharp decline in consumer expenditure (Jayachandran, 2022). The AD curve was seen to be moving to the left by this decline. Diminished customer assurance and uncertainties about the future furthermore has led to a decline in expenditure. Industries saw major uncertainty and supply chain interruptions, which created pressure on them to cut down on investments. Numerous projects were closed due to this reason. Production processes were disrupted by lockdowns and social distancing measures, which declined the short-run aggregate supply. As a result, The SRAS curve shifted to the left. The immediate result of the pandemic was a major rise in unemployment as companies shuttered and employees were terminated. The unemployment rate rose sharply from 5.1% in February 2020 to around 7.5% in July 2020. The AD curve has shifted to the left, showing this rise in unemployment.
Reflection on Learning
The most important lesson from this report is the understanding of the relationship of global economies and the multifaceted nature of development. It was very difficult to grasp the full scope of how global events and policies impact global trends. The most important question for future study is how sustainable development can be achieved in upcoming years, and to balance economic growth with social equity and environmental sustainability. One crucial aspect gained is the importance of viewing development beyond mere economic growth. While GDP and trade volumes are important, human development indices and measures of well-being like the Happiness Index provide a more detailed picture of progress (Chaisse, & Dimitropoulos, 2021). A particularly challenging aspect was analyzing the factors that helps to economic disparities between developed and developing nations. Understanding how historical, geopolitical, and structural issues shape these differences required integrating a wide range of data and perspectives.
Conclusion
The present state of international economic development has been marked by a global crisis recovery that is quite uncertain. The developing countries have shown significant progress; others continue to face major challenges impacting their growth in the long term. Foreign aid remains a crucial component for many developing countries, yet its distribution is often subject to geopolitical interests. OECD reports indicate a decline in aid to the least developed countries, which raises concerns about meeting Sustainable Development Goals. On the other hand, foreign direct investment has shown resilience, with global FDI flows recovering by 10% in 2024. Developed economies have benefited more from FDI, though countries like India and Vietnam have attracted significant investment due to favorable business environments and reforms. There is a requirement of immediate attention to sustainability and steps that will be necessary to achieve long-term goals. Workplaces will always evolve, and remote employment will be accepted more. Many public health initiatives were put into place, including vaccination programs, social distance rules, and mask requirements. Both crises had a significant impact on the United States, changing many facets of the country's economy and society. Major policy and regulatory reforms aimed at averting or lessening future crises have also resulted from the reactions to these crises. A crucial role is played by government fiscal policies which show recovery efforts, though high debt levels pose future risks. It becomes very necessary to address economic disparities and ensure equitable access to resources long-term progress. If focus is given on these major areas, global economies can easily continue towards a more resilient and inclusive future.
References
Chaisse, J., & Dimitropoulos, G. (2021). Special economic zones in international economic law: towards unilateral economic law. Journal of International Economic Law, 24(2), 229-257.
Jayachandran, S., 2022. How economic development influences the environment. Annual Review of Economics, 14(1), pp.229-252.
Tram, P. N., & Ngoc Huy, D. T. (2021). Educational, Political and Socio-Economic Development of Vietnam Based on Ho Chi Minh’s Ideology. Ilkogretim Online, 20(1).
Haryanto, T. (2020). COVID-19 pandemic and international tourism demand. JDE (Journal of Developing Economies), 5(1), 1-5.
Jackson, J. K., Weiss, M. A., Schwarzenberg, A. B., Nelson, R. M., Sutter, K. M., & Sutherland, M. D. (2021). Global economic effects of COVID-19. Congressional Research Service (CRS) Reports and Issue Briefs, NA-NA.
Yeyati, E. L., & Filippini, F. (2021). Social and economic impact of COVID-19. Brookings Institution.
Milanovic, B. (2022). After the financial crisis: the evolution of the global income distribution between 2008 and 2013. Review of Income and Wealth, 68(1), 43-73.
Mühlich, L., Fritz, B., Kring, W. N., & Gallagher, K. (2020). The global financial safety net tracker: Lessons for the COVID-19 crisis from a new interactive dataset. Boston University, Global Development Policy Center.
Arif, M., Naeem, M. A., Hasan, M., Alawi, S. M., & Taghizadeh-Hesary, F. (2022). Pandemic crisis versus global financial crisis: are Islamic stocks a safe-haven for G7 markets?. Economic Research-Ekonomska Istraživanja, 35(1), 1707-1733.
Ali, A. N., & Mazal, A. R. (2022). The Implications of the International Monetary Fund on the Global Financial Crisis. journal of kufa studies center, 1(65 (part1)).
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