GMAT Essays (AWA)

Topic-->The following appeared in a research paper written for an introductory economics course:
"For the past century, an increase in the number of residential building permits issued per month in a particular region has been a reliable indicator of coming improvements to that region's economy. If the monthly number of residential building permits issued rises consistently for a few months, the local unemployment rate almost always falls and economic production increases. This well-established connection reveals an effective method by which a regional government can end a local economic downturn: relax regulations governing all construction so that many more building permits can be issued."

AWA-

The author's opinion that rising permits for building construction as reliable indicator of economic development is flawed.The author argues that government must relax regulations governing building constructions in order to reduce unemployment reduces every economic approach to a common approach and not consider every economy from its own perspective.The argument also considers a cause and effect to be the correct cause for that effect without looking at alternate reasons.

Firstly,it is possible that what may have worked in some areas may not work everywhere.It is also possible that what may have worked everywhere may not work in some areas.The author believes that real estate will create new jobs for its citizens .However ,it could be that the citizens will actually lose their land to real estate agents and owners and will be forced to take up new work with which they are not familiar.This could be counter productive as transition from one skill to another skill that has not been known before will take a lot of time.The number of such land losers will increase in due course of time and thus will cause more unemployment .

Secondly,it is possible that even if a struggling economy decides to relax the building permit rules and citizens also agree to it,it may not work.There will be a lot of competition from other economies which may have taken some or the other steps to improve.Due to proximity of an ailing economy to another major economy,
the businesses will bypass the new economy and will still trust the major and successful economy.A businessman is more likely to prefer London for business over Manchester even though Manchester is cheaper and closer to London.It is the quality of service that has to be met and that will be the challenge for the new economy.

Thirdly,what has been happening over a century may not be true for the next century.Business changes and with it everything changes.New technology and new ideas keep evolving .It is more important to be updated with the newer ideas than continue with the age old concepts.It is possible that an ailing economy after getting some aid from an outside source may outperform others by investing on its own strength .It may be agriculture,mining,tourism ,manufacturing .


Thus,the author's conclusion that real estate permits can improve the job market is very causal in nature and considers all things to be same.It also does not want to change from the age old concepts and does not want to consider other reasons.