Austrialia´s Economic Growth

Economic Growth Economic growth is accompanied by an increase in the value of goods and services produced by the economy over time as a result of changes in the aggregate supply and demand level measured at the annual rate of change in real GDP. Since the negative growth rate of the Australian recession in 1991 was -0.2%, sustainable growth in the past 20 years was stable and the annual average growth rate was 5%, but slowed down to 1% in the 2000s Did. Demand for Australia's mineral resources such as coal and iron ore increased by 50% and 80% respectively, as the driving force of global growth moved from the United States to China in the 2000s, supporting the growth since 2004 and since 2003 It brought TOT. The annual rate of 88.6 in 2010 has been raised to 153.2.

Is this telling the economic downturn? What does the stock market say to us on economic performance? To answer this question, the chart compares the annual return of real GDP in the US from 1930 to 2017 with the annual return of the S & P 500 index. We use the annual Standard & Poor's 500 Index Return Data Set at New York University's Stern School of Business School and the real GDP data set of the US St. Louis Federal Reserve Bank growth rate. Figure 1 compares the annual rate of return of the S & P 500 index to the annual real GDP growth rate of the US (each point represents one year). Best fit line and 95% confidence interval added. We also plotted the distribution of S & P 500 index return and GDP growth rate. Visually, there seems to be no clear relationship between stock market return and GDP growth rate, but let's see if some statistical inference can be made from the data.

Since 1980, I made a major change in the tax law on the GDP growth chart. The average GDP growth rate during this period was 6%. The best economic growth rate in 1984 was close to 9%. The lowest economic growth rate in 2009 was about -4%. I emphasized the year after the tax cut (as we expect GDP to grow more rapidly) and the annual increase in red tax (because it is expected to shrink or develop more slowly). Before we begin I would like to admit that this is a very rough analysis. The tax law varies with type and scale, and various elements gradually appear. Nonetheless, if we consider that tax laws will have a significant impact on economic growth, economic growth will slow down the year after the tax increase was implemented, and economic growth will become bigger in the year tax reductions were implemented I will forecast.

One of the most frequently discussed issues in economics is how tax rates are related to economic growth. People who support tax cuts argue that lowering the tax rate will increase economic growth and prosperity. Others insist that almost all the benefits are due to rich as we have tax cuts, as there are people who pay almost all taxes. What is the advice of economic theory on the relationship between economic growth and taxation? When studying economic policy, it is always useful to study extreme situations. In extreme cases, what happens if there is a 100% income tax rate or what will happen if you raise the minimum wage to $ 50 per hour? Although not quite practical, it shows a very surprising example showing the direction of important economic variables when changing government policy.