ECONOMETRICS

Determinants of Economic Growth of Sweden

Determinants of Economic Growth of Sweden

Introduction

The purpose of this study is to work on the merits and problems of the factors that serve as the determinants in the economic growth of Sweden. The economic growth of a country depends on output of the economy that is production factors. Sweden has since the Iron Age had extensive foreign trades, which generally are limited to a few key imports and exports. Economic growth is the increase in the amount of goods and services produced by an economy. These goods are produced using elements of the main production, the land, labor, capital and organization. It is not necessary that the factors that are important for the determinant of GDP growth in Sweden are same with other economies as these factors may possible vary in accordance with other country.

Discussion

Merits

It is vital for a country to know about the factors that important for the economic development. As in the paper, the factors upon which Sweden economy depends can be the national capital stock, national labor stock and national human capital stock. In addition, as it found that the growth of GDP significantly and positively depends on the national capital stock. Therefore, in the short run, growth of GDP is determined by the preceding values of capital stock. It found that the capital stock adds a significant increase in the GDP growth of Sweden for the subsequent period. It means that the more prospects capital holders have to invest into development products when the capital stock is more; this will help the Sweden economy to grow.

Economic growth is also known that a positive change in the level of production of goods and services the state is in a certain period of time and that means economic growth, in general, increase the income of a country. Furthermore, the economic growth measured using the percentage of growth of GDP and it compared with the rate in a given year predecessor. The increase in capital and technological progress and improvement, in the level of education, is the main causes of economic growth. GDP is the most common measure used to describe economic growth (Martynovich, 2010). With economic growth meant an increase in GDP over time. Economic growth means that each year produces and consumes more than the year before. If economic growth in Sweden is 3 percent a year, this means that GDP has grown by 3 percent; if it produces 3 percent more than last year. GDP is the value of all goods and services produced in a country during a given period; although, GDP is not a perfect measure, nevertheless a rough idea of how wealthy a country is.; in 2010, Sweden's GDP roughly 3306 billion (De-Graaf, Wann and Naylor, 2001). For example, compared with the United States whose GDP is about 40 times larger than Sweden; a major interruption of growth during the early 1990s; when GDP fell for three consecutive years.

Problems

Recent studies have shown negative economic growth, especially the deterioration of human health due to contamination of water and ...