Question

Has the Growth of Newly Industrialized Economies Hurt Advanced Countries' Economies? Discuss and elaborate.

Answer 1

Newly industrialized economies are the one which has the level of economic development ahead of the developing nations where as lower than that of advanced economies now if we consider NIE they have the high growth rates, pulling millions out of poverty and are increasingly gaining voice in the global trade one part of NIE growth suggests that this lead to shifting of industries from advanced to NIE on account of lower costs and cheap infrastructure with less stringent laws but one should consider the holistic picture this movement also provide companies from advanced economies access to a large markets, as well as helping their consumers on account of cheap products, we can take examples of garment exports from South Asia this have not only created the livelihood in host nation but companies who have their facilities over there are generally from advanced economies and the money they make is essentially ploughed back into their own nation.

Growth of advanced economies can not be compared to that of NIE simply on account of economic theories which suggeste the steady state for the economy and also smaller growth rate in advanced economies is still larger than in absolute number when compared to a NIE. NIE growth should complement the growth of advanced economy on account of growth in global trade, investment oppy etc and shouldn't be considered as adversary.