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Essay on Different Economic Needs
Chile is a republic in southwestern South America, bounded on the north by Peru, on the east by Bolivia and Argentina, and on the south and west by the Pacific Ocean. It has an extreme northern-southern length of approximately 4,270 km (about 2,650 mi), but its average width is less than 180 km (110 mi).
One of the key economic problems facing Chile today is the growing gap between productivity and demand. Growing competition forces companies to cut jobs and cap wages. This dampens demand, which leads to even fiercer competition. That, and technological development, causes productivity to rise, meaning that even fewer workers are needed to satisfy demand (OECD, 2003). More people lose their jobs, wages are lowered, and demand is stifled further
The sustainability problems of the macroeconomic global project lie in the imperfection of the market and in a certain lack of discipline amongst the fund recipients; in the difficulties of reestablishing balance by way of reducing expenditure in view of the reduction of investment inflows; in the impact provoked by an inflow of non-sterilized funds on interest rates and on value of financial assets (specifically, stock market assets); and especially, in the over-rating of local currency for extended periods of time. All these events are currently of concern in Chile, although their outcome was of lesser importance due to the existence of a fundamental macroeconomic balance (OECD, 2003).....
