The luxembourg Economy (Complete Review)

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Luxembourg- Prologue

Luxembourg is a highly industrialised and prosperous economy, which is currently recovering from the economic turmoil of 2009 and more recently the European debt crisis. These downfalls have followed long periods of economic success and constant growth giving Luxembourg a Gross Domestic Product (GDP) to envy.
Luxembourg has been commended for its financial services and banking ability which have consistently been industries fuelling its economic development.
As a nation it is a relatively small state with a population of around 480 000. Due to this minute labour force there are a range of implementations guaranteeing a constant flow of employment, which have also aided in insuring an adequate quality of life.
The Luxembourg government has maintained a high level of regulation and intervention attempting to uphold strong economic growth.  Its administration and financial regulators have employed an array of effective long term and short term strategies comparable to the Monetary and Fiscal policies.

Luxembourg- Quality of life and Social indicators


Economic growth is defined as an increase in the productive capacity, and there for output of a nation. Despite having a moderately a small economy with a relatively undersized labour force Luxembourg has been able to achieve and sustain rapid growth over the past ten to fifteen years. This growth has allowed Luxembourg to obtain one of the largest GDP’s per capita, at around $79000 American dollars (among all OECD Countries).
This great GDP translates to an extremely high national income increasing the ability for its population to satisfy its wants. This increased purchasing power and capability to satisfy desires is a leading factor giving Luxembourg a great quality of life.

Although these social and economic indicators may be high, GDP and national income are only a few factors influencing living standards. More accurate determinations are derived from the Human Development Index (HDI). The HDI is based on three main variables: life expectancy, educational ability (adult literacy and combined primary, secondary, and tertiary education), and GDP per capita.
Bellow Source 1 shows that although Luxembourg has a substantially higher GDP than other OECD nations like America and Australia, its HDI isn’t considerably greater.

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Source:
 
Column 1: calculated based on the component indices.
Column 2: World Bank (2009d). "World Development Indicators". Washington DC: World Bank.

Luxembourg- Quality of life and Social indicators CONTINUED


In more recent years, international uncertainty has caused a halt in growth rates and has substantially  slowed production in Luxembourg. Following the crisis the nation faces weaker performance and an adverse effect on its living standards.
In response to this the Luxembourg government implemented a range of key social and economic strategies including the building of new infrastructure, tertiary education incentives and taxation benefits,  all  with the hope of ensuring long-term ...

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