The paper "Growth Miracle in China" is a wonderful example of an assignment on macro and microeconomics. Solow growth model has been used to explain many intricacies behind the economic growth in that it is concerned with the accumulation in a pure production economy whose components are labor (L), capital(C), and knowhow (A). The Solow's growth model argues that economic growth is a resultant factor of the enumerated three factors. In this regard, the model explains economic growth and potential for growth in economies based on their ability to acquire the three factors and consequently used them to enhance increased economic productivity.
Consequently, China’ s growth model can be evaluated based on this model. In this regard, its historical growth, current status, and growth potential based on the model. Mainly the Chinese growth miracle is hedged on its high population (Bodvarsson & Van, 2013). According to the International Monetary Fund (IMF), China is one of the most populated countries in the world having a population of over 1.4 Billion people. China is endowed with numerous natural resources relied upon as raw materials in the global market.
One of them is the textile industry's raw materials on cotton. Moreover, China is in possession of various metallic and non-metallic resources that enabled the country to earn extra income from the exports made (Truman, 2006). This had a further effect on the income rate of the workers implying that the miners and other working individuals got a wage increase, hence attracting other individuals to work. This resulted in many people getting into the industrious in order to earn. Historically, there was a change in the prices of goods and services.
As a result of this change, the majority of the population sought ways to earn extra income to sustain their level of living standard and, as a result, the market became flooded with more employees. On the other hand, Chinese economic growth was as a result of increased capital supply. In this case, the model identifies capital as both the tangibles and intangible factors of production in the economy.
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