Эссе на тему: "Gross Domestic Product"

Gross Domestic Product (GDP) is one of the most widely used measures of an economy’s output or production. It is defined as the total value of goods and services produced within a country’s borders in a specific time period — monthly, quarterly or annually.
Samuelson and Nordhaus neatly sum up the importance of the national accounts and GDP in their seminal textbook “Economics.” They liken the ability of GDP to give an overall picture of the state of the economy to that of a satellite in space that can survey the weather across an entire continent. GDP enables policymakers and central banks to judge whether the economy is contracting or expanding, whether it needs a boost or restraint, and if a threat such as a recession or inflation looms on the horizon. So, GDP is a very important index which helps to define the place of one’s economy on the world’s arena.
Nowadays the problem of increasing of GDP is very urgent, especially in the context of achieving convergence with OECD levels of GDP for such countries as the Russian Federation and Chine. Let’s consider what ways can be used by government of these countries in order to receive good economic results.
To begin with, it is necessary to analyze the economic situation in the Russian Federation. Today our country facing a lot of problems among which corruption, a prevailing amount of export of energy resources, insufficient interaction with other countries which impede the full development of international economic relations, etc. But these problems are well-known in public and government as well. A lot of force is directed to solve them. So, it makes possible to conclude that’s it is not everything that doesn’t allow the Russian Federation to achieve the economic growth and to increase its GDP. The most useful ways from the side of the government of the Russian Federation will be presented below.
The first thing that needs to be said is the increasing of national human capital as the factor of increasing GDP. It is very interesting that recently British and German scientists have shown, an increase of one point in the average level of the IQ of the country's population means an increase in GDP per capita of $ 229, and each additional item in the IQ estimate of 5% (with all the contingency and controversy of these tests) increases the GDP per capita by 468 dollars. The increase in the GDP of Russia is possible and realistic with the growth of national human capital and its main indicators - primarily the level of education, culture and science. The average IQ of candidates of sciences is 125, specialists with higher education - 114, incomplete higher education - 105-110, and office workers and skilled workers - 100. Thus, the more specialists with higher education we have in the country, the higher the income per capita and the GDP growth rate we get. And in this way the government should be interested in quality education and comprehensive development of nation.
Secondly, the growth of GDP of the Russian Federation can be fulfilled by using the cluster model of economy. Sustainable competitive positions may be provided by means of economic clusters, which include such factors of institutional development as a public-private partnership, a synergistic effect, increased opportunities for innovations, cooperation between government, business, science and education. The cluster concept represents a new point of view on the development of the economy and today it is a significant factor of increasing the competitiveness of the economy. The cluster structure has characteristics which are not inherent in other forms of dimensional organization of production, including the synergies, the social capital, public - private partnerships, etc. all of which give it an additional competitiveness. The cluster organization of production, is a phenomenon of the rapid economic development of many countries and regions. Economics of such economically highly developed countries like the USA, the UK, Germany and others produce and export more than half of industrial production through clusters. So, this foreign experience is very valuable.
Thirdly, our country needs global changes and transition from the socio-economic strategy of "getting up off the knees" to a strategy of a high standard of living. President Vladimir Putin skillfully builds his power vertical and a foreign policy that claimed Russia was "getting up off its knees." His first decade in power was marked by economic growth and a consumer boom in exchange for a crackdown on individual freedoms and an expanded role for the state in politics and the economy. After the quick victory in the war against Georgia in 2008 and the swift annexation of Crimea, Putin has firmly set Russia on the path toward restoring its superpower status based on an anti-Western and nationalist state ideology. But now this strategy is not actual anymore and doesn’t show high results. The modern society pays attention to the quality of life of individual. And GDP is an indicator of a society’s standard of living. Many people might have heard the term standard of living before—it means all of the elements that contribute to a person's happiness. Standard of living is a broad term that encompasses many factors—including some that are not bought and sold in the market and some that are. The level of GDP per capita, for instance, captures some of what we mean by the term standard of living, as illustrated by the fact that most of the migration in the world involves people who are moving from countries with relatively low GDP per capita to countries with relatively high GDP per capita. The dependence between GDP and the quality of life is obvious.
And now, let’s consider the economy of another developing country – China. The economy of China is one of the leading economies of the world, is the main competitor to the US economy. But today we can see a slowdown in GDP growth rate of China’s economy. One of the reasons for the slowdown is the change in the economic model. Earlier the accent in the development of the economy was on industrial production, and in recent years the Chinese leadership is betting on the development of the sphere of services and domestic consumption. Nowadays, one can observe the growth of the national debt and the outflow of capital; bankruptcies of companies are occurring more often, the share of problem loans in the banking sector is becoming more threatening. So what methods of government tools can change this hard situation?
Firstly, we all know about the miracle of the Chinese mentality. The Chinese people, living for a long time in extremely poor conditions, developed a number of distinctive features of a national character. On the one hand, they have high diligence and discipline. On the other hand, Chinese who have learned to circumvent the imperfection of the business environment are distinguished by their high level of enterprise and competitiveness. Equally important is the tendency to adopt positive experience, both local and external, the ability to compete, both locally and internationally. The scale of business development is huge. An important feature is frugality, which is connected with the historically established limitations of the pension and social insurance system. The national culture in the person of Confucianism encourages the cognition and use of the best experience that is actively used by China. After obtaining the imported technology in China, the process of transferring the manufacture of components usually begins, then their assembly, and sometimes there are own workshops that make copies, including clandestine ones. Periodically, the authorities are arranging a fight against piracy. And government can use this features to motivate people and to develop higher national ideology.
Another factor of GDP’s growth is the strategy of “revival of the village”. China already has some experience of transformations in the sphere of village and agriculture. The communes were abolished, instead of which a family contract was introduced. The government allowed the free sale of surplus agricultural products produced after the state had received the state procurement plan. Land plots were fixed in long-term lease. Cooperative village enterprises began to appear in the village. These measures created conditions for increasing effective demand and living standards for the population, led to rapid growth in agriculture, its modernization, prepared a serious platform for the development of the entire economy as a whole, and were the base for the development of entrepreneurship. Increasing prosperity in the countryside contributed to the development of small rural usury, which played the role of a financing channel for both the development of local businesses and for the resettlement and opening of business in cities. But as life shows these changes are not enough. Reforms are the most valuable weapon for the revival of the village, it is necessary to unconditionally liberate the mind, to abolish abuse within the system, to activate the resource elements of the village in order to uncover the activity and creative energy of the broad masses of peasants, to unite all social forces aimed at helping, supporting and reviving the village. In order to revive the village, it is necessary a higher-order strategy with real investments, increasing guarantees and investments, accelerating the formation of a multilateral system with preferential financial guarantees, focusing on the financial sphere and active participation of the society. The government of China must resolutely fight the problem of fragmentation in current village support projects; ensure a unified planning of agricultural funds. The strategy for the revival of the village is a long-term task of a historical nature, one can’t strive only to speed one-sidedly, and moreover, one can’t inflate ostentatious activity, it is necessary to affirm the idea, the task, to determine the far-reaching route, to create support for a reliable revival of the village.
And finally, one of the most important factors of increasing GDP is growth in labor productivity by using robotization. The global economy has faced a slowdown in labor productivity. And it reflects on the GDP of particular countries as well. With the growth of the quantity of life in Chine, the price on labor is growing too. That’s why it is important to substitute people in such work places where only mechanical moves are needed. Robotization is part of a comprehensive automation of production, its main component. In practice, this process involves the use of robots and robotic systems in enterprises on an industrial scale. Automated lines can be equipped with industrial robots, the presence of which will positively be reflected in the functioning of the whole complex of equipment. Also such mechanisms can be included in flexible automated production. The advantage of industrial robots is that for their reconfiguration to manufacture other products it does not require any special expenses, which ensures the process of product output is sufficiently versatile. The use of robots is possible both in isolation and in a complex manner. The peculiarity of industrial robots is the flexibility of reconfiguration. For the production of new products in most cases it is enough to introduce another program. This property is indispensable for manufacturing, since half the volume of production is made in medium or small batches. If the industrial lines are not robotic, then to create products that are produced in small volumes, only 5% of the total working time will be spent. The remaining 95% will take up the machine setting, changing tools, loading and unloading parts, etc. If a robotic production is used to manufacture the same lot, the time ratio will be significantly increased towards productivity. Another positive effect of using robots is the saving of raw materials and materials, but on the condition that the industrial process is organized rationally. Thus, robotization is a great opportunity for development and economic growth. And the governments of China have to support such technologies on enterprises.
To conclude, it is important to say that we all know that the processes of globalization and the spread of innovations show that increasing the competitiveness of the economy at the expense of the traditional factors of production is no longer effective. And that’s why in this essay were proposed different and sometimes innovative methods for increasing the GDP of such countries as the Russian Federation and China. These countries have a great potential and in the future can improve their economic positions.