I need macroeconomic expert who can explain the following questions with real-examples: 1. Global Competitiveness
I need macroeconomic expert who can explain the following questions with real-examples:
1. Global Competitiveness Index:
Which macroeconomic concept can be reflected through the Global Competitiveness index for specific country? Is it Fiscal, Monetary, Commercial or Supply Side Policy, or GDP? Please explain more details.
2. Foreign Direct Investment and Gross Capital formation:
2.1. When looking for indicator of investment in specific country, which is more powerful and influential; Gross Capital formation of foreign direct investments and why?
2.2. What is the difference between both of them; please try to simplify the answer.
2.3. When I can use Gross capital formation as indicator of investment versus the foreign direct investment and vice versa.
Kindly try to mention examples not just the internet definition as I need to really know when using both of them in analyzing macroeconomics.
1) The Global Competitiveness Index (GCI) is clear reflection of the various supply side policies undertaken by an economy. As per the GCI, Competitiveness is defined as a set of institutions, policies and factors that determine the level of productivity of a country which is clearly the supply side policies like tax and subsidy policies, labor market reforms, etc. undertaken by economy to boost the productivity of the factors of production. The level of productivity in turn sets the level of prosperity that a country can achieve.
2.1) Gross capital formation is a better indicator of investment than FDI as the latter includes only the investment expenditure made of foreign nationals on our country whereas the former reflects the total new investment expenditure made in the country including FDI.
2.2) FDI includes only investment by foreign nationals whereas GCF includes investment both by foreign and national residents. Hence GCF is a broader concept than FDI.
2.3) When you need to measure only the investment expenditure made by foreign nationals, use FDI and when you need to measure total investment in a country use GCF.