The paper "Australian Growth Beats Estimates as Rebalancing Begins by Michael Health" is a delightful example of an article on macro and microeconomics. Michael Health in his article, Australian Growth Beats Estimates as Rebalancing Begins: Economy cites that the economy has grown faster than it was forecasted. Australia was among the few countries that were not hit by the recent global economic crisis thanks to a boom in resource investment. The boom has helped the nation in achieving continued growth over the past few years. Currently, the resource-investment boom is no more and the country has to rebalance by transitioning from a resource investment-led economy towards other sectors such as household spending.
Rebalancing has started to show benefits where household spending increased by 0.8% in the last quarter of 2013, growing the GDP by 0.4%. Additionally, the country has seen an increase of 2.4% in exports, while machinery and equipment reduced by 8.8%, leading to a 0.4% reduction in the GDP. Unemployment has reached a record height of 6%, which presents one of the main challenges to the economy. This essay analyzes the article using several economic theories and principles relevant to GDP growth.
Health (2014) cites that the economy grew by 2.8%, which was above the estimates of 2.5%. Currently, the growth rate in unemployment is at 3%, caused by the rate of real gross domestic products that keep it constant. With a lower growth rate in GDP, it means unemployment is slowly but steadily rising. Only a growth rate of more than 3% in the economy can slow it's down. The article indicates that a nation’ s economy is dependent on household spending, investment, and capital accumulation.
One of the economic theories that can explain this situation is the economic growth theory. Analysis The economic growth theory identifies several sources of economic growth in a country. This theory states that economic growth is a long-term expansion of a country’ s productive potential. It measures the long-run path of output in a country over a period of several years, even decades. Each country has different economic drivers, which influence a country on different levels. Some of these drivers include growth in the labor force, physical capital stock, technological advancement allowing higher output per employee, quality of labor force, and increasing demand in goods and services.
ReferenceHealth, M. (2014). Australian Growth Beats Estimates as Rebalancing Begins Economy. Retrieved from http://www.bloomberg.com/news/2014-03-05/australia-s-economy-expanded-faster-than-forecast-last-quarter.html