UFP Economics and Finance (Business & Marketing Research Paper)

UFP Economics and Finance
COMPARATIVE ECONOMIC GROWTH AND LIVING STANDARDS
RUSSIA AND THE UNITED STATES
Name: Zhihua Zhang
CEG No: 08116050
Tutor: Sally Wang
Word Count: 2195
Date of Submission: March 18, 2021
Contents
Research TopicsPage No.
1 Comparative Economic Growth and Living Standards 3
2 Overview: GDP and Major Sectors 3
3 Government Policies that Stimulate Economic Growth 7
4 Standards of Living 8
5 Comparison and Analysis 12
6 Contribution of Economic Growth to Standards of Living 15
7 Conclusion 15
8 References 17
Comparative Economic Growth and Living Standards: Russia and the United States
Economic growth plays an important role in both developed and developing countries as it can be used to assess the health of an economy. According to Endovitsky and Popkova (2018, p.139), developed countries use economic growth to establish and maintain economic dominance and leadership, while developing countries use economic growth to improve their economic position and standards of living. To understand how different countries fare economically, a comparison of economic growth and standards of living between countries is necessary. The purpose of this paper is to compare the economic growth and living standards of Russia and the United States (U.S.). An examination of each country's major economic sectors, government policies, and standards of living will be conducted using various indicators. Then, the extent to which economic growth contributes to standards of living will be established based on the comparison and analysis.
Overview: GDP and Major Sectors
               Different sectors of the economy play a role in promoting economic growth. Below is a description of the key sectors that drive economic growth in both Russia and the U.S.
Russia
               Russia is an emerging economy that has enjoyed moderate economic growth in the past. However, Russia's Gross Domestic Product (GDP) annual growth declined steadily beginning in 2010 from 4.5% to -1.973% in 2015 (World Bank, 2019). The negative GDP growth rate in 2015 was attributed to a decline in the prices of oil (Mau & Ulyukaev 2015, p.19). Also, the global financial crisis that occurred in 2008 contributed to the general decline of Russia's GDP growth rate. However, the GDP annual growth rate rose steadily and reached 2.536% in 2018, as shown in figure 1 below (World Bank, 2019). This was attributed to an increase in oil prices, global growth, and Russia's ability to bounce back from a prolonged recession (World Bank, 2020).
               The energy sector is one of the key sectors that drive economic growth in Russia (Trading Economics, 2020). Russia is a leading producer of oil and natural gas. According to Organisation for Economic Co-operation and Development (OECD) (2020), 36% of Russia's federal budget came from oil and natural gas in 2016. This percentage rose to 39.3% in 2019 (Kulachnskaya et al. 2020, p.2). Also,...