What is the relationship between economic growth and stability?

The relationship between economic growth and stability concerns the way the political stability of the nation can lead to its economic growth. Such relations can be observed by the analysis of economic predecessors of politically stable countries in relation to countries where political climate is more unstable. The common denominator and the most visible relationship between economic growth and stability is that the stable environment promotes economic growth.

is one of the ways related to economic growth and stability is in the area of ​​investment. No company or individual, whether local or international, will feel comfortable to invest in any country where the political climate is characterized by shocks and a lot of uncertainty. This is because such a risky investment would go against the main goal of profit because there would be a significant lack of guarantee about investment safety. When Local entrepreneurs stay any significant investments in their economies, such a situation will affect the economy as a whole.

Direct foreign investment also plays an important role in the development of the economy. This shows the link between economic growth and stability, because the low -rating countries in terms of stability will not be a source of attraction for investors looking for international markets in which they can invest. An example can be seen in the field of tourism, because if there is not enough stability in the economy, there will be few investments in the form of hotels, tourist attractions and commercial airlines. The result is a reduction in the number of people employed and a lower turnover for much needed finance to facilitate economic development.

One of the effects of insufficient stability in the country is to reduce gross domestic first -year (GDP) and also reduce the general standard of living for most of the population. If there are very few entrepreneurs due to uncertainty, it will affect the ability of citizens to find a job. If people do notOhou find a job, they will not be able to spend money on different types of consumables, which will either lead to a slump in the economy or inflation. Inflation could be the result of a reduction in the production rate, causing a reduction in the rate of supply, which increases the price of goods and services.