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... Shape and length of business cycle differs from one country to the next, level of economic growth between different countries is closely related and recessions and booms tend to occur at similar times. ... One of the major reasons for the slower level of economic growth in Europe compared to the US during the 1990s was the fact that Europe central banks tended to have higher interest rates.
· Government Fiscal Policies- If a Govt in one country raises taxes, while the other country cuts taxes, economic growth is likely to move in opposite directions in these two countries. ...
Changes in Global Financial Markets (FOREX):
Definition: Foreign exchange markets (FOREX) are networks of buyers and sellers exchanging one currency for another where the value of currency is expressed in terms of another currency. ...
Comparative Advantage: The principal of CA states that even if one country can produce all goods more efficiently than another country, trade will still benefit both countries if each tends to specialise in the production of the good in which it is comparatively more efficient. ... CERTA is one of the most comprehensive free trade agreements in the world. ...
International Organisations:
The role, importance and influence in the global economy of international organisations: ***DEVELOP THIS MORE***
One of the problems that countries have not reached an agreement on establishing international institutes that can deal with the problems created by Globalisation. ... Establishing global rules on freeing up world trade and resolving trade distributes between countries
Major Institutions-
WTO: Known as the world trade organisation it is one of the most powerful global economic institutions. ... One of the most important actions in recent years is to support the “Heavily Indebted Poor Countries Initiatives” in which it aims to reduce debt by two thirds in 46 of the worlds poorest countries in Africa, South Asia and Latin America. ... Given that the high-income economies have just under one billion of people out of a world of 6 Trillion people, there is clearly a high level of inequality in the global economy. ... However TNCs do not operate under the laws of one government and so can move their production facilities to countries with the lowest government regulations, lower labour standards and environment protection laws can lead to exploitation and environmental degradation. ... FM’s shift massive volumes from one country to one another on a daily basis and when the sentiment turn against a particular economy or region it can happen swiftly and with devastating effects. ... It has been commented that during financial crisis, rather than acting as a force for the efficient distribution of capital throughout the global economy, financial markets act as a “wrecking ball” smashing one economy after another. ... One reasons why in 1990, there was a period of substantial growth was that economies were not aligned in their stage of economic cycle.
Approximate Word count = 6903
Approximate Pages = 27.6
(250 words per page double spaced)
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