The U.S. has experienced many boom/bust cycles. Now...the economy has expanded for several years, and productivity has improved almost continually...What, how, why, when, has changed to afford this outcome?© BrainMass Inc. brainmass.com March 4, 2021, 7:40 pm ad1c9bdddf
The U.S. has experienced many boom/bust cycles. Now...the economy has expanded for several years, and productivity has improved almost continually...What, how, why, when, has changed to afford this outcome?
This has happened due to competitiveness of US. The seeds of this was laid down in the beginning of this century. Let us understand it how and why it has happened. Michael Porter has introduced the 'diamond of national competitiveness' with four 'facets' determining the competitive strengths and weaknesses of countries and their major sectors.
? the existence of resources/factors (e.g. human resources and research and information
? a business environment that invests in innovation;
? a demanding local market; and
? the presence of supporting industries.
1) Factor: the nations position in factors of production, skilled labor, and infrastructure.
Free trade policies and Promotion of entrepreneurship in USA
Classical economic analysis indicates that free trade increases the global level of output because free trade permits specialization among countries.
Specialization allows nations to devote their scarce resources to the production of the particular goods and services for which that nation has a comparative advantage.
The benefits of specialization, coupled with economies of scale, increase the global production possibility frontier. An increase in the global production possibility frontier indicates that the absolute quantity of goods and services produced is highest under free trade. Not only are the absolute quantity of goods and services higher, but the particular combination of goods and services actually produced will yield the highest possible utility to global consumers.
Free trade policies of USA have allowed faster growth. Laissez faire policies?the absence of government intervention in trade, entrepreneurship and investment?is often ...
Annualized growth of real GDP is discussed.