Macroeconomics Country Analysis - RMIT - Problem Set

Macroeconomics ECON 1192 - Individual Problem Set 1
Question 1
i.
Turkeys GNI per capita ranked at 50th and HDI ranked at 76th out of 198 countries in 2017 (UNDP 2018a).

ii.
There is a large difference between GNI per capita ranking and the HDI ranking of Turkey. HDI is a composite of three indicators which are GNI per capita to evaluate the economic performance, life expectancy at birth to measure the health and expected years and means of schooling to assess the education. If a nation achieves higher levels of these figures, its human development is expected to be high as well. Turkey is 14 places higher by GNI per capita than HDI indicating that the education and healthcare quality lagged behind the development of the economy.

Table 1. Turkey HDI components from 1990 to 2017 (UNDP 2018b)
From 1990 to 2017, Turkeys HDI increased by 36.6 percent. From Table 1, it can be drawn that the majority of the enhancement is driven by rising incomes, not health and education. Turkish government healthcare expenditure was 3.3% of GDP in 2017 while that of OECD countries' average was 6.5% (OECD Stat 2019). Domestic and regional instability also hindered the improvement of healthcare and education in Turkey (OECD 2017). A disparity between the performance of knowledge and health and economic growth would impede the socioeconomic sustainability of Turkey.

Question 2

i.
Finland outperformed Turkey in all indicators which leads Finland to achieve higher HDI rank and GNI per capita rank than Turkey (McConnell et al. 2009). Finland HDI value is 0.92 which puts the country in a very high human development category and achieves the 15th position in the chart while that of Turkey is 0.791 standing in the high human development section at the 64th place. The ranking of GNI per capita of Finland is 25 with a value of $41,000 and Turkey stays at the 50th with the amount of $24,800 (UNDP 2018a). It can be derived that Finland and Turkey are heading in a divergent direction of the development progress of human quality. Finland is better off...