Regional Economic Growth in America- Case of The Republicans
Introduction
Regional economic growth has been a wide-faced issue. Many SMEs and other micro-enterprises are closing down every now and then. The question is, who is responsible for the don turn or success of the local business entities? Should it be the responsibility of the local, state, or federal government to keep going these business entities? Should it be the responsibility of the owners of the shops? In one way, the government may have contributed to the failure of the business since one of the economic principles states that government can intervene in businesses, so bring about continuous trading; this is through proper allocation of resources. Again, economic principles state that business people think at the margin. It may be due to the business thinking that their undertakings are not producing desirable profits and thus end up closing. The law of demand and supply plays a greater role in enhancing regional growth. Cost of production, elasticity, efficiency, and availability of market opportunities are key indicators of whether a region shall have a positive or negative economic growth. America has recently faced two economic extremes in different areas. The democratic- voters are well off, living in urban areas where the government has provided most of the social amenities. On the other hand, the Republicans have experienced economic downturns, possibly because of the failure of the government to provide social amenities in those areas. The issue of economic growth may thus be tackled well by the help of the government. The question is, how would the government intervene in helping the economy to grow?
Economic Growth Model
In the economic growth model, an aggregate growth function is described as Y-f(K, L), where Y is the income or output from various business entities. K represents capital, while L stands for labor. For the economy to grow, it is thus determined by both labor and capital. Capital includes, among other things, good infrastructure, roads, and machinery. The government has, therefore, to ensure roads are maintained in a good state, and there is political stability for economic growth to take a positive direction.
Demand and Supply
The quantity demanded is different from the quantity desired. The businesses might close due to the lower demand that is accompanied by a strong desire for goods and services. The demand is expected to rise when the customers have enough money to pay for the products at the prevailing market price. The supply can be in plenty, but customers fail to develop an interest in buying, forcing the suppliers to lower prices. This reduction in prices is what sends most business owners at home. In the case of republicans, high transport costs are said to have contributed to high prices, making it impossible to make enough money from the sales. In this scenario, many sellers dropped the business for other affairs.
Price Elasticity
Price elasticity is the percentage change in quantity demanded over the percentage change in the price of the goods demanded. Low price elasticity (less than 1) in the Republican region of America has forced many business people out of the market. This is because as prices go up, fewer people have had money to keep buying. This has been attributed to the reduced support from the government. If the government offered incentives, the production cost would have been low, enhancing the reduction of the price rates.
Availability of Market Opportunities
An opportunity is an attractive potential business opening that presents itself to the business owners or those looking forwards to establishing new business ventures due to less rate of government involvement in the creation of an enabling environment. It became hard for business people to utilize market opportunities. Even if the opportunities are readily available, resources to execute them is a challenge. The challenge is mainly due to the public resources that the government should provide to the people. The small business owners are the most affected when the public resources are limited. Large firms can easily change and install their machinery to execute the activities that seem to pose a challenge to them. These firms, for example, can purchase their vehicles that help in getting raw materials from other regions where the cost is not as high as the ones found in the immediate environment.
The skills of the republicans also contribute significantly to the rate of economic growth in America. It was reported that low-skilled business people in this region led to low productivity. This means that the more we complain about government intervention, then we should also consider the skills applied in the business sector. Traditional ways of doing business contribute significantly to the failure of the businesses leading to low economic growth. An example of the traditional ways in which the business people of business include depending on traditional manufacturing is the main way of earning a living. In the contemporary world, depending on the traditional industries may not allow fast economic growth.
The table below shows the economic performance of the republicans from the year 2008 to the year 2018. The trend in the national income generation was due to the challenges brought about by government failures as well as those failures due to the laxity of the business people.
| year | 2008 | 2010 | 2012 | 2014 | 2016 | 2018 |
| regional income | 56000 | 55500 | 54300 | 54000 | 53700 | 53000 |
| economic change | – | -500 | -1200 | -300 | -300 | -700 |
In the above table, the economic change is measured by the change in the regional income. For one, the gross income is low in this region, making the per capita go down. The most challenging thing is that the income has been reducing from time to time regardless of the efforts the individuals put in their daily business undertakings.
Conclusion
Research shows that economic growth in the region under study is a concern of both the government and the individuals’ ability. The negative change in total regional income primarily results from poor resource utilization and the costly means of acquiring stock. If the costs are reduced, then it could be possible for retailers and other firms to charge relatively low prices.
Recommendations
It is recommended that the government show chip in the economic welfare of the republicans. Incentives should be used as a tool to increase the morale of the business people who should, in turn, have a positive attitude in business. Efforts should be put by both the government and the retailers to avoid traditional manufacturing; this will improve the rate and quality of production. Demand is likely to improve when the quality of production is maintained. Reducing taxes for the small scale businesses will encourage the poor and the middle-class to participate in income-generating activities, which in turn improve economic growth.
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