Econ 561
October 22, 2012
Overview of Global Economy: Current Trends
The short answer concerning the current trends of our global economy is “not good.” CrĂciun, L. (2012), provides more detailed perspective when indicating that “We are now at a point in mankind history when the range of uncertainty is unusually high. We are experiencing still the worst financial crisis ever since the Second World War. This crisis is quantitatively different from other financial crises. Furthermore and according to Katherine Garrett-Cox, chief executive, equity markets remain "as challenging as at any time in generations."
"We have witnessed a perfect storm created by the global financial crisis which has culminated in the recent uncertainty within the Eurozone, the increased dependence on sovereign debt and the need to substitute consumer demand from the West with that from the Far East," she said.
Overview of US Economy
The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $47,000. According to the CIA World Fact Book, “In this market oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominately in the private marketplace.” Despite the extreme economical challenges, businesses in the United States are afforded an elevated level of flexibility compared to our counterparts in Western Europe and in terms of the freedom to develop new products and price in accordance with a capitalistic marketing system. Additional information based on the CIA World Fact Book suggests that a two-tier labor system is evident where those at the bottom “lack the education and professional/technical skills of those at the top and fail to get comparable pay raises, health insurance coverage, and other benefits.” This is significant when realizing the impact that discretionary income (or lack thereof) has on the potential...