How does economic growth in developing countries affect the UK

Can someone help me with this question by listing a few ways that growth in developing countries affects the UK? By this I mean affect it in any may possible, through trade, investment immigration, cost-push inflation, etc.
I have a lot of examples already but I figured it is better to get some information online too.
This is in relation to Unit 4 (Econ 4) Economics for AQA boaRD

(edited 8 years ago)

Reply 1

TSR Jessica

Sorry you've not had any responses about this. :frown:

Are you sure you've posted in the right place? :smile:

Here's a link to our subject forum which should help get you more responses if you post there. :redface:

You can also find the Exam Thread list for A-levels here and GCSE here. :dumbells:

Just quoting in Puddles the Monkey so she can move the thread if needed :h:

Spoiler

Reply 2

She-Ra

Universities Forum Helper

Original post by Oceancity

I've moved this to the economics forum for you :smile:

Reply 3

Fudge2

Original post by Oceancity

1) We could start to export to them which increases AD which increases real GDP etc
2) Firms may outsource manufacturing to over there from the UK to benefit from cheaper labour so we get greater unemployment, notably structural and regional in manufacturing's case

:smile:

Reply 4

midgetspinner

One benefit could be is that this creates a potential market for the UK to enter. As developing countries grow, incomes rise as more people are generally employed and private business opportunities arise. Derived from increased income, the marginal propensity to import rises (think of it has the want to import foreign goods) for individuals in developing countries, therefore the UK may be able to trade with the developing economy. Further compliment this analysis by saying how exports are an injection and use some AS/AD analysis to show the impact of greater exports. To evaluate such a statement, you could say that the UK is in the European Union and common external tariffs may be in place, therefore the UK is subject to regulations, which may prevent to trade with the developing economy.

Quick update, cost-push inflation may occur as developing economies grow, thus demand for commodities increase, therefore prices for raw materials will rise causing cost-push inflation. To evaluate such a statement, consider that recently there has been a huge downward pressure on commodity prices, and bring in the oil example, if applicable.

If you have any other questions, feel free to reply and I will answer when I have time.

(edited 7 years ago)

Reply 5

Oceancity

Original post by glebp

Thanks for the help - just one more question: What impact would this have on UK living standards?

Reply 6

midgetspinner

Original post by Oceancity

Thanks for the help - just one more question: What impact would this have on UK living standards?

Well, to introduce some basic theory, they would obviously go up as export led growth will create jobs, also via the multiplier effect, hence more have a greater income, etc.