In this article I’m going to try to explain the differences between emerging and developing markets according to OECD and IMF definitions,the I’m going to talk about relationships between unemployment,GDP and industrial production. Then I’m going to look at the effects on emerging and developing markets and try to find an answer the effects is significant or not. There are significant 2 market types in the world that over the years debates about differences,advantages,disadvantages are held on.

Before we look at the differences between emerging markets and developing markets,let’s look up what is emerging market what is developing market?Emerging market concept was originally found by the World Bank economist Antoine van Agtmael by the 1980’s. Emerging markets are nations with social or business activity in the process of rapid growth and industrialization. According to Chuan Li from The University of Iowa, ‘’ ‘Emerging markets are countries that are restructuring their economies along market-oriented lines and offer a wealth of opportunities in trade, technology transfers, and foreign direct investment’.

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There are 28 countries that considered as emerging markets but some of the leaders are China, India, Indonesia, Brazil and Russia.If we start to look at the differences between emerging markets and developed markets,from the emerging markets stand point, they are regional economic powerhouses with large populations, large resource bases, and large markets. However if there is any kind of an economic crise,they can bring down their partners also with them. Also they adopt open door policies to replace their traditional state interventionist policies that failed to produce sustainable economic growth. According to the IMF, every developing country that is committed to gaining the confidence of the international financial markets must dedicate itself to good governance.Good governance fosters a path for strong and stable economic development.

Poor governance could adversely affect private market confidence and reduce private capital inflows and investment, retarding economic growth in developing countries. Over the years unemployment is one of the biggest problem in the world that effects a lot of different things like GDP,and industrial. Now we are going to explain relationship between unemployment and GDP.

Unemployment is a macroeconomic phenomenon that directly affects people.When a member of a family is unemployed, the family feels it in lost income and a reduced standard of living. There is little in the realm of macroeconomics more feared by the average consumer than unemployment. Understanding what unemployment really is and how it works is important both for the economist and for the consumer, as it is often discussed. According to the Okun’s Law, change in real GDP = 3% – 2 x (change in unemployment rate). This equation basically says that real GDP grows at about 3% per year when unemployment is normal. For every point above normal that unemployment moves, GDP growth falls by 2%.

Similarly, for every point below normal that unemployment moves, GDP growth rises by 2%. This equation, while not exact, provides a good estimate of the effects of unemployment upon output. There are several reasons why GDP may increase or decrease more rapidly than unemployment decreases or increases.

As unemployment increases, ? a reduction in the multiplier effect created by the circulation of money from employees ? unemployed persons may drop out of the labor force (stop seeking work), after which they are no longer counted in unemployment statistics ? employed workers may work shorter hours labor productivity may decrease, perhaps because employers retain more workers than they need. The relationship between unemployment and industrial production according to index of industrial production details out the growth of various sectors in an economy. With that,according to Spencer, the index of industrial production is an index of physical output — tons of steel, kilowatts of electricity, number of light vehicles, etc. — while real GDP is a measure of the value of output. So in a way comparing industrial production and real GDP is like comparing apples and oranges.It can be done, but you have to be careful to do it right. For many people living and analyzing developments in the rust belt this moderate difference does not seem to conform to their experiences.

Everything they see tells them that the differences are much greater than this. And they are right. If you look within the industrial production numbers you see that the 3% growth trend shown in the first charts stems from two very different trends.

One is the growth of high technology products like computers and other office equipment, communication equipment and semiconductors.Over the last quarter century production of these high technology products has averaged about a 21% growth rate while all other industrial output only experienced a 1. 1% growth rate. This growth is more consistent with the general feeling that traditional rust belt production has been stagnate and with positive productivity this generated falling rust belt manufacturing employment. After we review the relationships between unemployment,GDP and industrial production we are going to look at what is consumer confidence index briefly and then we will check up the effects of those three on consumer confidence index.First of all let’s know about consumer confidence index. Consumer confidence index is, the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.

How confident people feel about stability of their incomes determines their spending activity and therefore serves as one of the key indicators for the overall shape of the economy. In essence, if consumer confidence is higher, consumers are making more purchases, boosting the economic expansion. On the other hand, if confidence is lower, consumers tend to save more than they spend, prompting the contraction of the economy.According to Larry Levin, the gloomy economic outlook has significantly affected the Consumer Confidence Index. Many economists point to low job prospects and concerns about income as a basis for the low CCI readings. According to the Bureau of Labor Statistics, unemployment for most major working groups stood at 9.

7% in January 2010 compared to the 7. 6% reported in January 2009. Also, the weather may have impacted consumer’s sentiment. Due to the snow, many stores have closed down which could lower the public’s confidence about the economy.As James E. McWhinney from Forbes says, ‘In the most simplistic terms, when their confidence is trending up, consumers spend money, indicating a healthy economy. When confidence is trending down, consumers are saving more than they are spending, indicating the economy is in trouble.

The idea is that the more confident people feel about the stability of their incomes, the more likely they are to make purchases. ’. As we can imagine any kind of rise in unemployment,any kind of a downgrade in GDP,consumer confidence index will be effected.