2 What is an economy?
3 The UK economy
4 Economic Globalization
5 Economic Growth & Measurement
6 Growth and Environmental Gains
7 Environmental Losses and Repair
8 National Well-being, Health and Happiness
9 Alternative Measurements 7
Economies around the world are varied and the wealth of the country is portrayed by its economic growth countries with high economic growth are referred to as developed countries and those with lesser growth are considered to be developing countries.
As we all know that economic growth brings wealth to the country but in this report we will find out whether economic growth can bring health and happiness also.
What is an economy?
An economy is a system to control the income, assets, resources and wealth of a country it includes the production, consumption, distribution, imports and exports of goods, it also controls the prices and consumption of goods in a western society like the UK by controlling how much is consumed and what prices are paid the demand and supply of goods can be controlled.
The UK Economy
The UK government collects various taxes for example Health care, education, free meals and various benefits which are provided by the Government. The UK economy is one of the largest 7 economies globally and is recognized as a developed country. The majority of countries in the east are seen as developing due to their lower economy except Australia, New Zealand and Japan as detailed in Figure 1 (Fribbance, 2009, p. 18). The UK has various regions which are measured for its Gross Value Added (GVA) it determines the contribution
2 made by each region to the national economy in terms of industries and production excluding taxes. Each region is measured for its GVA per head, as a percentage of the UK average, by residence and the UK average by percentage of the workplace. London has the highest GVA and the North East the lowest, however it must be noted that London is a world city, therefore, a centre for business and finance unlike the North East, see Table 2 (Fribbance, 2009, p.27).
The UK is classed as an “open market” where people are free to:
• Trade in goods/services with other countries.
• Import Cheap goods
• Out-source call centres
(International trade levels for the UK are comparably higher than other countries, for example the OECD(2008) figures for 1992 show, the UK traded 24% of the value of its economy whereby USA only traded 10% (Fribbance, 2009, p.19)). * Make inwards and outwards foreign direct investments (FDI) e.g * Land Rover, Jaguar, Corus steel, Tetley tea * Barclays * GlaxoSmithKline
Whilst this openness with TNC’s helps the global economy, some argue it’s at the loss of jobs and production in the UK (Fribbance, 2009, p.21). The UK economy growth is only possible with connections to the global economies (Pryke, 2009, p.104)
3 Economic Growth and Measurement:
Economic growth brings wealth to a country the rate of growth and level of growth are measured by FDI and Gross Domestic Product (GDP). GDP is a measurement of income per person between 1992 and 2003 the UK saw a large increase in both inward and outward FDI showing:
• Increased foreign assets for UK firms/households
• Outsourced manufacturing services
• Banking, IT, insurance services and consultancy growth
• Better competition in global market
By 2008 when the recession took place the UK had become better off than 20 years earlier according to GDP figures. Table 1 shows the UK ranked 7th out of the group of 7 major developed countries in 1997 – however in 2005, UK was ranked 3rd (Fribbance, 2009, p.24-26) with a GDP of $32,860 (US), a rise of 47%.