Economics is one of my favorite subjects in the world of academics. The reason why is because the study of economics teaches us how government systems operate and how specific policies enacted by the government effect the people both living within that nation’s borders and outside as well. The study of economics also teaches us how and why some countries economic policies and systems fail, which allows us to keep track of how these nations combat their economical crisis.
In the video where Nadia Calviño comments about Spain’s future economical growth, she eludes to the point of how to much intense international competition can be very harmful to a nation’s economic stability. A perfect example of this is the Cold War between the United States of America and the Union of Soviet Socialists Republic (The Soviet Union). In the Cold War, both the US and the Soviet Union wasted a lot of their money and resources into the the Arms Race and Space Race against each other. The result was that both nations faced major budget deficit issues for the amount of spending each nation took to be more powerful than the other. The US was able to recover from this massive budget deficit, but the Soviet Union was never able to fix its budget deficit issue and eventually collapsed because of it.
This idea I believe reflects a problem with economic analysis today, or atleast the way it is reported sometimes. A big part of economic analysis is comparing one nation’s economic statistics to another. I have no problem with these comparisons; in fact, i think that these comparisons can be very helpful towards a nation’s growth. There is problems though when these comparisons are used to determine whether or not a country has been economically successful or not. Every country has different economical situations, like environmental and climate in the country, the population and demographic in that nation, etc., that effect how they will create certain economic policies. Due to these wide range of varieties and differences between different nations, I don’t think that comparing other nations with each other is an accurate representation of a nation’s economic success.
The example in the video is when Nadia Calviño is asked how she feels knowing that Spain’s in a better situation than Italy is. Her response to this was that she could not comment on another Nation’s policies or situation and that her focus was on the economic stability of Spain. This, in my opinion, was the correct response because comparing Spain’s economical situation to a nation’s like Italy – who is currently in a very difficult political and economic time – is not gonna show how Spain is improving economically. All this comparison between Spain and Italy shows is that Spain is in a much more stable situation than Italy is; this comparison will not show how Spain can continue to improve its Economy. The focus of every nation should be to make sure they are in an financially stable situation, and this will very between each nation. I am not saying that a nation should solely focus on its own progress. It has been proven by countless economists that a healthy foreign relationship is super beneficial for each nation involved in that relationship. What I am saying is that we should not get to caught up in intense International competition and comparisons cause we could end up running this country into the ground.
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