Research and critical review exercise Essay Example

Research and Critical Review Exercise on

McLean, Ian W. «Australian Economic Growth in Historical Perspective.» Economic Record 80.250 (2004): 330-345.

Summary on the main points in the article

The article Australian Economic Growth in Historical Perspective by McLean (2004) is based on the growth economics in Australia. The article assesses the implication of the growth economic literature in analysing Australia growth based on a historical dimension. The literature looks at both development economics and macroeconomics. The article focuses on proximate sources of growth and the impact of various economic policies in Australia. Lastly, the article looks at the deeper determinants which include the geographical and cultural influences on growth. The writer has accurately used the economic concepts in then article. This includes an in-depth look at the growth performance indicators, growth theory, living standards, GDP, sources of growth framework, scale economies and policy. The author has relied mostly on the macroeconomic theory to explain the Australian economic growth. This is especially through analysing the theory of economic growth.

Micro and Macroeconomic theories from the articles and discussion

The article pertains to the macroeconomic theory of economic growth (long run growth of income, output and employment). Through the economic theory, the article looks at the sources for the historical long term growth in Australia. This involves the economic productivity in Australia on a historical perspective, employment and the labour force. Through economic growth, citizens are able to enjoy better living standards. Good policies also accelerate economic growth as explained in the case of Australia (McLean, p.330-345). Based on the economic growth theory, economic growth is attained through efficiency of labour and capital intensity (Jehle, p.24). All these theories are well explained in the article.

The article begins with an analysis of economic growth theory in Australia. This is attained through analysing the indicators of long run growth. Through use of growth theory, it is possible to identify the key determinants in change of output per unit (Sargent, 31). This includes the income per person and output for every input in labour. According to (Lynn, 31) growth theory and applied growth analysis are vital in showing the dimension of growth in an economy and are used in the article. From the article, Australia economic success in 1890s is associated with the state support and a labour force that led to a state enterprise (McLean, p.330-345). The article has been able to clearly analyse the living standards which has experienced a relative decline from the late 19th century. GDP data is used in comparing the per capita income. The article also reviews literature using the comparison of real wages in analysing living standards. Australian growth rate in post war period is used and based on analysis of convergence. Sources of growth framework analyse literature on factor accumulation, technological change and scale economies.

It is important to note that macroeconomic is the main agent in the formulation and execution of policies (Mankiw, 44). According to López (2005), macroeconomics is vital in the formulation of the microeconomic models. This is an area that the author has been able to portray through the analysis of role of policies in Australia after market liberalisation. According to Maxwell (117) trade policies plays an important role in growth. The impact of trade protection policies is debated in Australian context in a clear manner. In microeconomics, there is literature on the welfare theory. This is a theory that looks at the economic policies and how they impact the community wellbeing (Dollery, p.84-90). Australia allocation of resources between persons is analysed. The resources were allocated with an aim of high incomes for inhabitants as well as Australia. Australian was among the first in attaining high standards of growth especially in 1850 to 1890 (McLean, p.330-345).

This is a well written article mostly based on the macroeconomic theories. There is also literature which can be associated with microeconomic theory. The article explains how Australia was able to use their resources, physical distance, institutional and colonial inheritance to attain sustainable growth. The article also explains the role played by culture, ethnicity and social norms in attaining economic growth. This article uses a clear language, economic theories and model to come up with an in-depth knowledge on Australia economic growth on a historical perspective.

Lessons on macroeconomics from the article

The article has given me a deep insight on the application of macroeconomics in understanding the economic growth. This is especially in the historical perspective. Through the use of theory of economic growth, the article has given me knowledge on the ways in which a nation is able to attain long term economic growth. I have been able to learn on the efficiency of labour and how it contributes to the economic growth. Through the lens of economic theory, I have been able to understand how Australian economy has developed in an economic history context in relation to long run growth. This is an article that has a lot of information based on the macroeconomic theories.

References

Dollery, Brian. «The timing of microeconomic reform in Australia.» Economic Papers: A journal of applied economics and policy 13.3 (1994): 84-90.

Jehle, Geoffrey Alexander. Advanced microeconomic theory. Pearson Education India, 2001.

López, Ricardo A. «Trade and growth: Reconciling the macroeconomic and microeconomic evidence.» Journal of Economic Surveys 19.4 (2005): 623-648.

Lynn, Stuart R. Economic Development: theory and practice for a divided world. Pearson College Division, 2003.

Mankiw, N. G. Principles of macroeconomics. Cengage Learning, 2014.

Maxwell, Philip. «The economics principles text: its evolution and influence in Australia.» Journal of Economic & Social Policy 3.2 (1999): 117.

McLean, Ian W. «Australian Economic Growth in Historical Perspective.» Economic Record 80.250 (2004): 330-345.

Sargent, Thomas J. Dynamic macroeconomic theory. Harvard University Press, 2009.