The world economy is influenced by both economic and no-economic factors (Schumpeter, 2017),

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The world economy is influenced by both economic and no-economic factors (Schumpeter, 2017), and therefore there is a need to keep a check on all the aspects that may affect the growth of the economy. Various non-economic factors are responsible for the increase or the fall of the economy of different countries around the globe. Some of these factors include; war, corruption, political instability, technology, government laws and regulations, education as well as innovations and training.

War is one of the factors that lead to the decline of peace within a nation or even the overall world peace and thus have a direct effect on the growth of the world economy (Duffield, 2014). Peace is deemed to be one of the major factors that encourage investments and as well favors trade between nations. With the disruption of peace, there will be tensions within the globe that will discourage investments and trade as well. Political stability, on the other hand, contributes to peace, and therefore political stability should be encouraged within nations to ensure their prosperity in business and the overall economy (Borner, Brunetti & Weder, 2016).

Corruption is directly related to the decline of the economic growth of a country because the money and resources that are deemed for development are pocketed by individuals, and therefore development is left to lag behind. The slow progress of the country discourages investment leading to low injections to the country’s economy. Technology, on the other hand, influences the mode of production, as well as the provision of services and therefore the more improved the technology, is the easier the production and service delivery.

Government laws and regulations play a significant role in the growth of an economy. Favorable laws and policies attract investments especially when there are subsidies for the provision of services. The development of regulations that favor business such as less taxation encourages investments contributing to higher production and the overall increase in the GDP of the country. Education and training equip the people with the necessary skills for the establishment of businesses. Innovations leads to the development of new technologies as well as the production of new types of goods and services that lead to the satisfaction of people’s needs and therefore for the fulfillment of human needs, creativity and innovation leads to the development of entrepreneurship to which increase the business ventures and the overall GDP of a country (Acs, Szerb, & Lloyd, 2017).

References

Acs, Z. J., Szerb, L., & Lloyd, A. (2017). The global entrepreneurship and development index. In Global Entrepreneurship and Development Index 2017 (pp. 29-53). Springer, Cham.

Borner, S., Brunetti, A., & Weder, B. (2016). Political credibility and economic development. Springer.

Duffield, M. (2014). Global governance and the new wars: the merging of development and security. Zed Books Ltd..

Schumpeter, J. A. (2017). Theory of economic development. Routledge.