Macroeconomic article

Macroeconomic article

Introduction
The article by Geneva highlights that India has improved its competitiveness to become position fifty-five globally (Geneva, 2015). The changes come while improvement in the macro factors is being experienced. India is experiencing expansion in its economy as it is experiencing growth in various sectors and also in the macroeconomic environment. The country is also experiencing a slight improvement in the infrastructure. Switzerland has been topping the list for the last five years while the United States, German, Singapore, and Netherlands are among the top five on the list. India has been experiencing a decline in the economy for the past five years; however, its current position acts as good news to the country. According to WEF, fraud, strategy volatility, inflation and access to sponsorship are the major issues facing many investors in India.
Conversely, according to the text there are various areas that India has been given credit for, for instance, in protecting the investors. India also has good racking on the gross national savings and their education system Geneva. (2015. According to the article, India is also ranked positively due to venture capital availability, its hiring and firing practices among many other areas. However, India still needs to make improvements especially on its budgets as currently they are ranked as the highest budget debts globally. The report also states that the current rankings show that India is capable of expanding its economy. Below we will analyze the article on India’s current economy and to do this we will apply various macroeconomics theories.
Economic theories
The principles that will be used during the analysis will relate to the occurrence of output, unemployment, and inflation. Macroeconomic theory includes the creation and utilization of different models. The models are utilized to clarify the makeup of an economy, and the task and implication of the branches that make up the formations (Mankiw, 2014). They also assist the economist in comprehending how the components are linked.
Output: country’s output is the lowest total of all the things that a country generates in a given period. Output refers to the things that are fabricated by a state to generate income. An output is mainly measured through the GDP (Mankiw, 2014). An increase in the economy is always brought about by the enhancement in technology and other capital.
Unemployment: The percentage of workers always measures the rate of unemployment in a country without jobs in the labor force (Mankiw, 2014). The employment rate can be affected by various things, for instance, condensed demand for produce.
Inflation and deflation: Inflation refers to the increase in prices in a country. Most countries fear inflation as it is assumed to cause various problems and also drag the country’s economy down. On the other hand, deflation is the decrease of prices in a country (Mankiw, 2014).
Analysis
According to the article, India’s is ranked at position 55 in the global competitiveness. One of the contributors to the increase in global competitiveness is brought about the country’s GDP (Geneva, 2015). India has a quality education system, and this is a real explanation why their economy is growing. When a country offers quality education, it is assured of better economic output. Many countries have a poor school system and this act as an advantage for India as it strengthens its competitiveness in the global platform. When a country has a weak education system, their overall economic output can be affected.

India’s ranking also shows that it has the potential to grow its economy. According to all the countries that are listed at the top of the list are known to have a healthy economy (Geneva, 2015). For instance, the US is known for its healthy economy globally. The country also protects its investors, and this attracts the international investors in the country. The increase in the investors means that the country economy will grow. The country also has a huge domestic market, due to its vast population (Abel & Bernanke, 2006). Therefore, any company that’s invests in the country it is assured that there will be people to purchase their goods.
Deflation also assists India’s ranking; initially the country was going through inflation. The prices of commodities had grown, and many businesses were not performing well thus affecting the country’s economy. According to the article, one of the threats that investors faced in India was inflation, however, with a decrease in the economy many businesses will now be able to invest in the country (Geneva, 2015). When the prices of commodities go up consumers spending is always affected. Many people may not afford the commodities, and their expenditure will be affected. However, the decrease in commodity prices will attract many consumers, and they will also have an urge to spend more.

India’s economic growth is also positively affected by the country’s anti-corruption stance. Initially, many businesses would find it difficult to invest in the country due to corruption, and it highly affected its macroeconomic environment (Geneva, 2015). Many companies would avoid spending in the country due to the poor working environment.  India’s macroeconomic environment is also affected by the enhancement in the state’s budget deficit. India was ranked as the highest budget deficit globally; however, this is improving, and this shows positive growth for the country (Gupta, 2004). 
India’s output is also affected by the poor technology (Geneva, 2015). Currently, technology is highly impacting the world’s business environment. However, this cannot be translated to India, as the country’s business technology readiness is inadequate. India is still using the traditional methods when transacting its business.  This shows that it is impossible for the country to do business on an international platform (Gupta, 2004). The poor business technology readiness may also lessen their income.  The state may not make profits compared to the countries that have fully embraced the use of technology in their business. 
When India economy improves, there is also a high possibility that its unemployment rate will decrease. When more countries invest in the country, they will be able to employ the unemployed persons. The employment rate may also be affected by the country’s GDP.  India is considered to have the best education system that seems to boost the country’s economy. The growth of its economy will mean that many people will be able to access employment.  The employment rate may also be affected by inflation (Geneva, 2015). When the consumers’ expenditure habits are changed, it means that the firms will not be able to produce many products. One of the causes of unemployment is the decrease in the fabrication. Therefore, in this case when the companies decrease their production due to the poor buying habits, they will need to cut off the number of the employees (Gupta, 2004). The companies will also not be able to hire more staffs. People doing personal businesses may also be affected by the consumers’ expenditure behavior. Some may be forced to close down their businesses, hence, adding to the unemployment rate. 
However, according to the article India has decreased its prices, it, therefore, means that it is going through deflation (Geneva, 2015).  The findings show that people will improve their expenditure habits and thus the companies will be able to fabricate more goods to satisfy the vast population.  The increase in production will require the country to employ more staffs thus, reducing the country’s unemployment rate (Gupta, 2004).

Conclusion

According to the article, India seems to be doing well in the macroeconomic environment. The positive report is brought about the country’s GDP. India has a good GDP and thus, showing that its output is positive. The positive output is brought about the quality education system. India is also going through deflation, and it seems to improve the country’s consumer expenditure habits. By decreasing the prices, the country ensures that many people will be able to afford the products. It, therefore, shows that the company will be able to produce more products to satisfy the consumers’ needs. It also shows that India’s unemployment rate will be decreased as many organizations will be able to employ more staffs and also retain the existing ones.

References

Abel, A. B., & Bernanke, B. (2006). Macroeconomics. Boston, Mass: Pearson.
Geneva. (2015, September 30). India sprints to 55th position on global competitiveness index as
macro factors improve. Retrieved October 15, 2015.
Gupta, G. S. (2004). Macroeconomics: Theory and applications. New Delhi: Tata McGraw-Hill.
Mankiw, N. G. (2014). Brief principles of macroeconomics.

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