‘Any economic indicator taken in isolation, without comparison with other indicators, says little; when compared with other indicators, it becomes brighter, more expressive. Without comparing economic values with each other, one cannot make the most elementary analysis, the simplest generalizations.’
This expression most accurately describes the task of comparing and contrasting essays in economics. As part of this task, the student not only learns to formulate his thoughts in writing, but also comes to such economic conclusions that acquire value and meaning only when compared to other economic indicators. In this article we talk about the essence of economic comparison and how to cope with comparing and contrasting essays on economics most successfully.
Economic comparison and contrast essay is a task that, in accordance with the modern world practice of economic education, is a necessary element in the study of economic theory.
The aim of the essay is to study various types of economic systems, to identify and analyze the similarities and differences between them.
The objects of study are economic systems that arose and developed sequentially in historical time, which existed simultaneously at different stages of the historical process, and which exist at present.
When you look for two objects for your essay, analyze a few of the main potential aspects of economic research:
A comparative analysis is carried out in an intercountry aspect, while comparing the economic systems of developed Western countries: the USA, Germany, France, Great Britain, as well as countries with developing economies in Europe, Asia and the generally accepted comparison of Russia, China, India, and Brazil.
As a result of studying the discipline, as well as conducting an independent analysis of economic systems in the course of writing an essay, students should form their own idea:
Hint! Above, it was a clue what indicators and characteristics you can compare and contrast in your essay.
Comparison is the most common method of analysis. Each indicator used for assessment and control is relevant only in comparison with another.
The comparison begins with the correlation of phenomena, the compared phenomena are analyzed. The obligatory rule for applying the comparison technique is the comparability of indicators in terms of structure and conditions of their formation since only qualitatively uniform quantities can be compared.
It is possible to distinguish three approaches to comparison and contrast in the essay:
The comparison begins with the correlation of phenomena. Remember: only potentially comparable phenomena are analyzed. The obligatory rule for applying the comparison technique is the comparability of indicators in terms of structure and conditions of their formation since only qualitatively uniform quantities can be compared.
A comparison of economic indicators can be carried out in different directions. For example, comparing the reporting data of the enterprise with the planned, it is possible to identify the degree of completion (or non-fulfillment) of the task.
Comparing the actual indicators of the reporting period with similar indicators of a number of past years, they evaluate the results of work in dynamics and the development trend of this economic process.
A comparison of the indicators of the analyzed economic entity with the average similar indicators for the industry reveals the place of the analyzed entity in the market among other competing entities, market share.
By comparing the indicators of the analyzed economic entity with highly profitable economic entities, unused reserves of production growth are identified by similar indicators.
A prerequisite for comparative analysis is the comparability of the compared indicators, assuming:
So, in order for your comparative essay on economic systems to be comprehensive, you need to describe:
In the comparative analysis of economic systems, traditional methods of economic theory are also used, including formal logic, dialectical logic methods, system research methods, methods of socio-spatial and socio-modern research, chronological, classifications, mathematical statistics, historical modeling, etc.
Based on this, a comparative analysis provides:
Along with this, the comparative method is used in combination with traditional research methods and new methodological guidelines that have appeared in economic methodology in recent decades.
When you compare economic systems, the comparative analysis method is especially effective when combining it with the historical method, and the method obtained as a result of such a combination is called comparative-historical.
The comparative historical method is a way of studying economic systems, in which, on the basis of establishing the general similarity of these phenomena, a conclusion is made about their genetic relationship or difference.
Economic history provides the widest range for the application of the comparative-historical method. It can be used in the study of almost any economic institution and at the same time, you can compare anything: individual enterprises, industries, countries, regions, etc.
In this case, a variety of business processes can also be subjected to analysis:
A comparative historical study of various statistical indices, as well as a comparative analysis of mathematical models that display particular economic processes in their historical dynamics, is very productive, visual and indicative.
A comparative economic analysis of models of economic growth and development, designed not only to identify common and different features of the development of various regions but also to ‘prescribe’ recipes for dynamic economic growth for developing regions or states, is very important here.
In the history of economic doctrines (the history of economic thought), the comparative historical method has so far been used extremely rarely. In this area of economic research, there are still extremely few works where a comparative analysis of various directions, concepts or theories of individual thinkers would be carried out.
In addition, here, just like in economic history, the problem is not only just writing a comparative work. Any comparison is not an end in itself, but only a launching pad for obtaining results that can advance economic science and practice.
Comparison and contrast of the features of economic growth models of highly developed countries (on the example of the United States and leading countries of Western Europe), in the face of a slowdown in global economic growth and uncertain economic prospects, is especially relevant. The economic development of the state, producing a quarter of the global GDP, actively affects the economic and political situation of other countries. Trends and processes taking place in the American economy give an important demonstration effect and are used as guidelines in making economic decisions or developing policies in other countries.
We begin the comparison with government intervention in the economy. If in the USA, it is possible to observe insignificant state interference in market processes, then in the countries of Western Europe there is active state regulation of the economy.
In terms of taxes, taxes and government spending (relative to GDP) are lower in the US than in other countries. In Western Europe, the state plays a crucial role in the redistribution of income; and there is a significantly higher tax burden.
Another different feature is the formation of competition. In the USA, this is the predominance of the mechanism of competition and market pricing, while in Western Europe, it is possible to observe a decrease in the role of free pricing due to government intervention.
Finally, in the United States, it is possible to call the labor market flexible enough, while the unemployment rate is quite high in Western Europe. This happened due to social programs to support poor people (in fact, who did not want to work). But as for the common features of the labor market in America and Western Europe, they both suffer from an influx of illegal labor.
In addition, it is possible to name a few more common features. This is the priority role of the service sector in the structure of the economy, industry as the most important sphere of material production, ensuring a high level of development of other industries, active and continuous financing of R&D by the public and private sectors of the economy, high qualification of employees, including the innovation sphere of the economy, and steady growth rates ; high level of well-being of the population, a high degree of involvement of the national economy in the world economic process.