Aggregate Incomes and Future of Economies

The size of the economy and aggregate income

The size of the economy and aggregate income are two good predictors of future economic growth. The aggregate income is a GDP element that may be used to compare economies of different nations because it is linked to a country's GDP and capital stock, which leads to total labor and technology efficiency. Cross-country variations in aggregate income result in disparity in physical capital per worker and worker human capital.

Peru's economy

According to the World Bank, Peru is one of the most promising upper middle-income countries. its GDP is 39th largest in the world and has the high growth rate since 2012–6.3% annual GDP growth rate (www.cia.gov). Its aggregate income is 444.46 billion Nuevo sol, which is equivalent to 137.116 billion US Dollar. On the other hand, Norway has a mixed economy with a very high standard of living (Noreng). Its position is 49th among all countries of the world as per GDP counts with an annual growth of 0.6% per annum (www.cia.gov). Its aggregate income is 2.57 trillion Kroner, which is equivalent to 373.11 billion US Dollar.

Economic comparison between Peru and Norway

From these statistics, it is obvious that the size of the economy of Norway is much larger than that of Peru but from the aggregate income and growth rate perspectives, Peru is scoring faster and higher. Based on the information above, it is easier to predict that the economy of Peru will outgrow that of Norway leveraging its high GDP growth despite having lower aggregate income. The cost of living is lower in Peru, which is a good economic factor for the country as far as foreign investment and global integration are concerned. Therefore, it is safe to say that Peru will be at a better economic position in 10 years from now.

Works Cited

Noreng, Oystein. Oil Industry and Government Strategy in the North Sea. Taylor and Francis, 2016.

Www.cia.gov. "The World Factbook — Central Intelligence Agency." Welcome to the CIA Web Site — Central Intelligence Agency, www.cia.gov/library/publications/the-world-factbook/rankorder/2001rank.html?countryname=Peru&countrycode=pe®ionCode=soa&rank=40#pe. Accessed 24 Mar. 2017.