demanded by the economy. This would mean that the supply may not necessarily meet demand, thereby decreasing the amount the economy would be able to grow by. Keynesian theory suggests this result, as it states that the economy cannot balance itself if there is a large portion of people unemployed. The converse is also true, as low GDP growth would increase unemployment, with a lack of economic opportunity resulting in less people being employed. Inflation harms GDP per capita, as it causes a decrease in the value of the currency, which means that a standard amount of money decreases in purchasing power over time. If the amount of goods/ services capable of being purchased with the same amount of money decreases, then spending will decrease in the economy.. This once again relates to Classical economic theory, because if the supply is greater than demand the full potential of the economy is not realized, and the GDP, and therefore GDP per capita, would decrease. Overall, Europe is economically safe, and for the most part, in an ideal situation. Based on the data, the main focus points of European governments should be to reduce unemployment and slow down inflation. Inflation is unavoidable in a purely capitalistic economy, so unemployment is the largest detrimental factor for economic success, and therefore more effort should be put into connecting unemployed workers with jobs to fully utilize their role in GDP maximization. Asia represents a different stage of economic growth than Europe, as it contains economies that are rapidly growing and are not yet as large as their European counterparts. This means that Asian nations have a high ceiling in terms of economic growth, but it also means that they are much more unstable, and therefore more susceptible to economic crises. In Asia, population and GDP have a strong, positive correlation, population change and GDP change have a strong, positive correlation, corporate tax rates and GDP per capita have a strong, negative correlation, and inflation rates and GDP change have a strong, negative correlation. These trends are more indicative of the rapid growth that developing
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nations tend to undergo. Population change and GDP change is the correlation that the rapid growth of Asian nations is most easily shown by. Population increases GDP, as seen in European nations, as it creates a greater volume of supply-and-demand based transactions. Therefore an increase in population would increase GDP, albeit the increase may be marginal. The fact that population change would result in such a large correlation with GDP change means that population growth is a much larger factor in Asian economies than anywhere else in the world. This goes back to the idea that Asian economies have not yet reached their ceiling for rapid growth, which means that demand is much higher than a supply of goods and services, so any new additions to the workforce are given a job out of necessity, to fully monetize the demand in the economy. This rapid growth of the workforce further boosts the ceiling of maximum output for the nation, meaning that its GDP would increase. Another interesting factor for Asian economies is corporate tax. By Keynesian economic principles, when the government spends money on public-work projects to reduce unemployment, the economy receives a stimulus and grows. By that same logic, if the government takes money from the economy in the form of taxes, the growth of the economy is reduced. If all of the tax money is then reinvested into the economy through public-infrastructure projects or simply by investing in the economy, then the economy will still grow. However, taxes are also used for non-economic purposes, meaning that the economy would be losing money from the system entirely, which not only reduces the value of the economy but also removes the buying potential of that money, so the demand decreases at the same time as the GDP. Therefore, it is clear that higher corporate tax rates result in lower GDP per capita for countries in rapid development. Lastly, inflation harms the GDP change in Asia for the same reason as Europe. Inflation decreases the buying power of money, reducing overall spending, which means that the total output of the economy reduces drastically, causing a much smaller GDP change.