Germany's Growth & Challenges

Germany's Economic Growth & Challenges

Factors that Influence GDP

Total Population - Total number of individuals living in the nation during a given year.

Population Growth - Measure of how much population has gone up every year is calculated in the GDP.

Surface Area -

Poverty Ratio at National Poverty Lines

Fertility Rates

Income Shared by the Lowest 20% of the Population

Forest Area

Prevalence of HIV/AIDS - Rates in which the population of a nation is HIV positive or has the AIDS virus.

Immunization Rates - Rates determines by the number of vaccinations occur in a year.

Mortality Rates - Calculated by the number of deaths annually in proportion to the population of the given country.

CO2 Emissions - The rates at which Carbon Dioxide is released in the atmosphere annually is calculated in the GDP.

Germany on a Business Cycle

Though the economy has expanded in some aspects, there are elements of the nation that are not doing as well. For instance, by sanctions being placed on Russia, there are not as much investment in German technological equipment by Russia, as well as the lack of oil revenue from Middle Eastern countries resulting in German luxury car companies being financially at stake. This could place the German economy on a business cycle that is leaning towards a recession.

Economic Advice

There are numerous factors in what makes Germany's economy robust, there is always room for improvement. In terms of expanded capital deepening, there can be several different methods of increasing this amount. A common way of increasing capital deepening is by firms providing job training programs to produce better trained employees. This could be expanded by providing tax benefits to companies that provide these forms of career training.

As for the expansion of saving and investment, the most simple way of doing this is by decreasing income tax brackets for all earners. This would cut income tax rates for not only Germany's middle class so they are able to invest more through consumption and for the wealthy which would result in more firms opening and declining unemployment rates. Another factor that may help with saving and investing could be in the hands of politicians. For instance, if a political figure is highly inspirational to the public when promoting saving and investing, it could have a degree of impact on the economic atmosphere of a nation. In addition to this, it is essential that the Euro retains its value in order to prevent inflation and a lack of investment.

When it comes to technological progress, there can be several different ways to encourage new technological advances. Along with the tax benefits previously stated, it would be an interesting concept to provide tax benefits to companies that manufacture technological products in Germany. This measure would be implemented in order to prevent outsourcing. In addition to this, there could be a greater emphasis on technological courses in public schools as well as public universities to encourage younger generations to become involved with technology.

Sources

Barnato, Katy. "Is ‘complacent’ Germany the real winner from loose ECB
monetary Policy?" CNBC. N.p., 13 May 2016. Web. 18 May 2016.
<http://www.cnbc.com/2016/05/13/
german-economy-more-than-doubles-growth-pace-in-first-quarter.html>.


Storbeck, Olaf. "Darkening German economy could be Merkel's nemesis."
Reuters. N.p., 9 Feb. 2016. Web. 18 May 2016.
<http://blogs.reuters.com/breakingviews/2016/02/09/
darkening-german-economy-could-be-merkels-nemesis/>.