Alex Gross - Changes in LRAS and SRAS

 Potential Changes in LRAS and SRAS in Saudi Arabia

Birth Rates - Quantitative

    Saudi Arabia has seen significantly decreasing birth rates for the last four years. While their birth rate is much higher than the United States (~16 births per thousand compared to America's ~11 per thousand) it is still much lower than the worldwide average, which is obviously more reflective of overall macroeconomic factors. Their birth rate decreased by 2.58% in 2019, 2.65% in 2020, 2.73% in 2021, and 2.8% in 2022. Therefore not only is the birth rate decreasing, but the rate at which it is decreasing is getting more and more rapid. A change in the birth rate in a specific area often causes a lack of sufficient work force for the future, and could have large consequences especially considering the context of Saudi Arabia's already below average birth rate. This would shift the LRAS to the left (inwards), signifying a decrease in Aggregate Supply and thus a decrease in potential work.

Data & Tech Sector Jobs - Qualitative

    Saudi Arabia is home to the Middle East's largest contributions to the International Data Corporation. Saudi Arabia's specific contributions include data and communication technologies, and advancements in energy. From 2019 to 2021 this sector increased (in GDP added to the economy) by over 8% in Saudi Arabia, and is projected to increased by ~2.5% in the next year. This is stimulating job creation in this sector, and consequently more education/training in this area, which is a very positive factor of production for their economy. This would shift the LRAS to the right (outwards), and increase potential earnings. Additionally, a very important aspect of worldwide economics in the current day and age is that technology, data, and communication is a sector growing in importance everywhere.


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https://www.macrotrends.net/countries/SAU/saudi-arabia/birth-rate#:~:text=The%20current%20birth%20rate%20for,a%202.65%25%20decline%20from%202019.

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https://www.trade.gov/country-commercial-guides/saudi-arabia-information-and-communications-technology


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