The trend in economic growth of a country Coursework

The trend in economic growth of a country - Coursework Example This essay discusses that throughout history there have been many studies on economic growth. Overall economic growth of a country is measured every year by the difference that has occurred in GDP over the previous year. Should we consider that a country grows only by analyzing the monetary value of the production of final goods and services during a period? In researcher’s opinion would have no sense not to consider the benefit that provides a trained workforce, or the economic stability of a country. To reinforce this idea the researcher will investigate past developments on this theory. Mincer elaborated a study about the relationships of the individual’s earnings as variable dependent in age, experience and education. Mincer considers that the benefits of education to the people can be extrapolated to countries. Considers that an educated workforce directly affects the growth of a country. He justifies that an extra year of education in a white man who did not work on a farm contributes a extra seven per cent of profit. Adam Smith was the first person that found some link between International Trade and Economic Growth. The work of Grossman and Helpman and Rivera-Batiz and Romer has also aided to clarify why the participation of a country in an integrated world economy can stimulate its growth. Oil production and exports affect economic growth. Limiting the supply of oil to a country can cause serious economic consequences. We must highlight the oil crisis of 1973 or the current threat from Iraq to the European Union countries to limit its supply. In relation to the political unrest, the IMF warned in its 60 years that a lack of political stability could affect economic growth.Regarding the number of murders; the current Mexican central bank governor Agustin Cartens (2011) said that violence inhibited economic growth. The model To begin with, we need to find the relationship between the dependent variables and independent variable (growth). Th e initial econometric model of the of this study is: y = ?0+ ?1(GRDP)+ ?2(TRADEHARE)+ ?3(YEARSSCHOOL)+ ?4(ASSASINATIONS)+ ?5(REV_COUPS)+?. Some of the coefficients are expected to negative because some of the figures of variables are greater than the figures in dependant variable. From the SPSS output table below us can note that there is a negative relationship between growth and rgdp60 as well rev-coups. This means that other factors help to increase growth as they have positive coefficients’. Coefficients Unstandardized Coefficients Standardized Coefficients t Sig. Model B Std. Error Beta 1 (Constant) .490 .690 .710 .480 RGDP60 -4.693E-04 .000 -.622 -3.167 .002 TRADESHA 1.562 .758 .238 2.060 .044 YEARSSCH .575 .139 .770 4.126 .000 RECOUPS -2.158 1.110 -.256 -1.943 .057 ASSIS .354 .477 .092 .742 .461 a Dependent Variable: GROWTH The model econometric model of the of this study will be y= 0.49 -0.00047(GRDP) + 1.561696 (tradeshare)+ 0.575 (Yearsschool)+ 0.354 (assassinations ) -2.1575 (rev_coups)+? Goodness-of-Fit Chi-Square df Sig. Pearson 232.676 4032 1.000 Deviance 188.381 4032 1.000 Link function: Logit. The goodness –of-fit- statistics for model is 232.6 this means that the data obtained from the random sample is greater than 5 thus it does not fit into a specific pattern. Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate 1 .599 .359 .305 1.582084957 a Predictors: