A Report On Economic Growth - 2284 Words

â€Å"Economic Growth Starting to Pick Up Pace† – Perth Now The article summarises the economic situation in the post mining investment boom period in Australia, touching on several macroeconomics including but not limited to economic growth, unemployment, GDP, fiscal and monetary policies. Essentially, economic growth is the increase in a country’s standard of living or its capacity to increase production of goods and services over time (Howitt and Weil 2008; Saymeh 2013, 341). Economic growth is an overarching concept that takes into account GDP growth, unemployment rate, productivity, etc. that eventually affect the nation’s living standard. Mining investment boom in Australia The most recent and largest mining investment boom in Australia†¦show more content†¦The post mining investment boom indicates that the industry’s investment pipeline is slowing as existing projects are completed, and the industry shifts focus to production (Finch 2014). Consequently, there is â€Å"a big fall in private investment† as depicted in the article (Cadden 2014). Complications of post mining boom Despite that positive contributions to economic growth from household consumption and government spending are offset by the major cutback in mining capex (Cadden 2014), the export volumes grew by 2.1% in the latter quarters of 2013 due to the expanded capacity from previous investment (Viola 2014). In this case, companies in supporting the operational phase of mining industry, strong trade-exposed industries, as well as export and import industries will benefit from this major shift of focus. Using the National Income Identity: GDP = consumption + investment (private) + government spending + (exports – imports) Y = C0+c(Y-T)- I + G + NX (1) Y = f (C, I, G, NX) C = f (Y, T) , I = f (Y, r) , NX = f (Y, Ã"‘) (+, -) (+,-) (+, -) Where: Y = Income / output / expenditure / GDP C = Household consumption expenditure T = Taxes paid by household I = Private investment expenditure r = Real rate of interest G = Government / public spending/investment expenditure NX = Net exports (exports – imports) Ã"‘ = real rate of exchange With the slowdown in mining investment (private) offset by the upsurge in