Trigger 4

The 4th trigger was all about country's economy. I wasn't there when the class opened trigger, but i looked the memo from moodle and i got a pretty good view what they were talking about.

They found these learning objectives;

1. In which ways can the government influence a country's economy?

2. How can a growing economy affect the sustainability of a country?

3. A) What are the different types of economy model?
    B) What is the most suitable economy model for a developing country?


1. In which ways can the government influence a country's economy?

I started to think this question trough compering Finland's and Estonia's government.

How much the government have money and for what they are using it? Is there any debt? From where is the money coming from? 

If you want to be an entrepreneur in Finland, there is so much bureaucracy you need to do and know about. And the governments attitude forward entrepreneurs, is it supportive or depressive?

In Estonia the profits that are left to the company's account, taxes are 0 %. In Finland it's 20 %. Whit this Estonia is hoping that company's will use their profits for investments.

In Estonia there is also low property tax, governments debt is lowest in the EU and governments budget is getting money from consumption tax and employer's payments.

But in the other hand, in Finland we are known from very good social system. Here men and women get almost equally the same salary when in Estonia women is getting 30 % less pay from the same job than men. We also have great system for family with kids, you will have about 100 € child benefit (plus 45 € if you are a single parent) when in Estonia it was earlier only 45 €. Now they have changed it rapidly and you will get more child benefit in Estonia than in Finland.

Maybe in Finland we could think about lowing the corporate taxes and by that way we could tempt more people to start business -> more job's -> employees get money -> they will spent the money to products etc.

2. How can a growing economy affect the sustainability of a country?

You have to get benefit from economic growth.

Employee gets a pay rise -> he / she will buy more products, food etc.

New companies will create new job's -> more products -> more professionals -> innovative -> even more job's.

The spiral of growth will create many new job's and the possibility of export to the world.

3. A) What are the different types of economy model?

When i searched information about economy models, there wasn't any particular model that would stand out. First i watched one video about economic models but there wasn't any different models, the idea about the video was just that there is so many different actors in economic field and it's quite complex in real world. The hint of the video was that you could try simplifying the assumptions.

    B) What is the most suitable economy model for a developing country?

"In just 10 years, Brazil has been able to use consistent economic growth to lift around 40 million people out of poverty. And while the "thought-leaders" at Davos have been wringing their hands about the perils of inequality, over the past 10 years all regions and ethnic groups in Brazil have seen their incomes rise, with the poorest benefiting significantly more than the richest." (Barrientos & Amann, 2014)

- Direct support to reduce poverty (invest in health + education)

- Investment in agriculture

- Political concensus



Resources:

1. Economic models (2017). URL:
 https://www.khanacademy.org/economics-finance-domain/ap-microeconomics/basic-economic-concepts/ap-economics-introduction/v/economic-models (accessed 25.9.2017)

1. Bäckren, N. (21.12.2015) Halvat palkat, vähän byrokratiaa, alhainen työttömyys, onko Virosta Suomen mallimaaksi? URL:
https://www.aamulehti.fi/maailma/halvat-palkat-vahan-byrokratiaa-alhainen-tyottomyys-onko-virosta-suomen-mallimaaksi-23308222/  (accessed 25.9.2017)

3. Barrientos, A & Amann, E. (17.4.2014). URL:
https://www.theguardian.com/global-development-professionals-network/2014/apr/17/brazil-role-model-development-africa (accessed 26.9.2017)