The World Economy Has Been Growing Constantly Last 55 Years

Decent Essays
The world economy has been growing constantly last 55 years except the 2009 recession that affected the global GDP by dropping it down a bit.

The world is divided into continents and so does the share of global GDP. Last 55 years Asian countries has seen tremendous growth compare to its counterpart Europe and Americas who has experienced a overall decline. Asian region has grown from 16.8% in 1960 to 45.4% in 2015. Asian and African continents have seen growth in both GDP and GDP per capita.

Despite all the sudden growth in Asia and Africa their GDP per capita is still low. Asia holds at 22.0% and Africa at 18.0% of the levels of Europe and the Americas GDP per capita.

Globalization benefits world economies and most economists agree
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The International Monetary Fund (IMF) and the World Bank offered help to India in exchange for economic reforms. The government of India finally decided to change its economic policies in 1991.

After IMF and World Banks involvement India took steps towards liberalization and privatization to reform India’s economy. Lowered tariff levels, reformed exchange rate policy, liberalized industrial licensing policy and also relaxed India’s foreign direct investment (FDI) policy. These reforms opened the doors for multinational corporations to invest in India. India received positive responses from international investors. Before the 1991 reforms, foreign equity ownership was restricted to 40 percent and the transfer of technology was necessary to do business in India. These barriers were removed for foreign companies. Many multinational corporations (MNCs) took advantage of India’s new economic policies and increased their stakes to more than 51 percent in their subsidiaries resulting in a several fold increase in foreign direct investment in just three years (Gosai, 2013).

Following were the major factors that contributed to India’s economic growth after the 1991 economic reform:
Foreign direct investment
Expertise in information technology
Increased domestic consumption

Due to the increase in foreign direct investment and expertise in information technology thousands of new jobs got created leading to increase in middle class
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