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Japan is also a developed country growing at meagre 2 - 3%. what is the rationale behind this?

2007-02-23 02:02:21 · 8 answers · asked by pearl k 1 in Social Science Economics

8 answers

There are many factors, but population growth and product development both play into the growth.

As the population grows so do the housing needs. Therefore, home building increases the gross domestic product. The population increases also create increased demand for products.

New products create demand for themselves. People like to have new things and things that do more than they used to. The new products are too good to pass up.

Old products break over time and need to be replaced and this creates demand for new products as well.

Japan has a much smaller population than the US and therefore has a much slower growth rate. Japanese growth is quite significant for the size of the country and the lack of natural resources within the country. The US has many more natural resources to promote growth.

Take care,
Troy

2007-02-23 02:25:18 · answer #1 · answered by tiuliucci 6 · 0 0

GDP growth = growth in productivity(output per worker) + growth in number of workers + inflation.
The US population and workforce is growing at about 1% a year while most developed countries have little or no population growth.
When recovering from a recession the previously unemployed workers get jobs adding to the number of workers,
Inflation has been running at about 2 or 3% a year.
The important number for the future is the productivity growth which averaged over the last 20 years or so is between 1.5 and 2 % for most developed countries including the US

2007-02-23 09:24:21 · answer #2 · answered by meg 7 · 0 0

According to the recent figures the US real GDP growth rate is at 3.2% for 2006 with Japan at 2.6% so I'm not sure where you got your 5% figures from.

Developed countries can still have relatively strong and stable growth if they improve technology or implement policies which increase the total output of the economy in the long run. This could be from better education and training or simply more people joining the workforce.

There may also be more investment by companies in capital goods meaning that they can increase production and efficiency.
As long as the economy is able to keep increasing the quality or quantity of its factors of production, it can keep growing at a fairy high and stable rate.

Remember that it is not all about figures, Iraq had a growth rate of 52% in 2005 but it is hardly a prosperous economy. A country needs to maintain a good growth rate over a number of years to see a real change in the standard of living.

2007-02-23 07:02:13 · answer #3 · answered by Peter 2 · 0 0

I think your question refers about the growing GDP

A better explanation is with an example.

Imagine USA GDP of 2004 is $ 3 billions and in 2005 is $3.15 billions (USA GDP grew 5% and on money terms, have 150 millions more). Now a country like Ecuador, they GDP of 2004 was 500 millions and in 2005 they GDP grew to 550 millions. They GDP grew in 10% and on money terms they have 50 million more.
Who grow more?, USA of course. They just need to grow 5% to stay developed, meanwhile not development countries need to grow more then 5% for several years to become developed.

2007-02-23 02:43:01 · answer #4 · answered by dsro 3 · 0 1

well, think of it. when the economy is already so huge, its difficult to grow fast... its practically a race against time. but 2% growth in the US could be 6% in India. it depends on the base. US and japan have very large bases, so their growth rate is slow.
India and China have relatively smaller absolute bases, so they grow faster.

2007-02-23 05:30:48 · answer #5 · answered by sushobhan 6 · 0 0

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2016-10-16 07:52:51 · answer #6 · answered by ? 4 · 0 0

Superb question.

Basically United States of America's people are mostly law abiding people.

They don't normally interfere in other's life.

Population is less in USA.

Not much corruption

Efficient both Government and private people are efficient.

Solution oriented Society.

Time concious people.

No strike no lock outs No hartal, No bandhs No destruction of Govedrnment properties or private properties

Not much selfishness.

Open Society. Real freedom to males and females equally.

More freedom in USA than in India

Not much of cheating and looting in USA compared to India

2007-02-24 17:25:03 · answer #7 · answered by Indian wizard 2 · 0 2

population growth and increasing productivy (which in turn comes from innovation)

2007-02-23 06:55:54 · answer #8 · answered by Anonymous · 0 0

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