Nobody downloaded yet

The Global Economy: an Austerity Measure - Coursework Example

Comments (0) Cite this document
Summary
Introduction An austerity measure can be defined as the official action taken by the government that aims to reduce the amount of government expenditure or the amount that is spent by the people (Jackson, 2011. p.3). The reciprocal circulation of income between the producers as well as the consumers is referred as the circular flow of income…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.3% of users find it useful
The Global Economy: an Austerity Measure
Read TextPreview

Extract of sample
"The Global Economy: an Austerity Measure"

Download file to see previous pages If the value of the left hand side of the equation is negative, then it must have been financed from somewhere. The right hand side of the equation denotes the current account balance. Therefore, (S-I) + (T-G) = (X-M) + foreign savings The essay will try to evaluate the austerity measures followed by the European Union and the spending on public works of China and the control of the country over bank lending. The essay will also take into consider how successful or failure such kind of measures have been for the countries with reference to the circular flow of income. EU austerity measures The direct result of the financial crisis that was faced by the European Union was the rise in public indebtedness. The financial crisis ensued into a sovereign debt crisis in some of the countries of the European Union in 2009. The forces favoring austerity got stronger. In the middle of the year 2010, an intervention package aimed to rescue the banks as well as stabilize the financial market was introduced within the euro zone not only for countries which were suffering from the crisis but also all other countries as well. The intervention package was accompanied by imposition of the packages of austerity. The introduction of the measures of austerity reintroduces the socioeconomic regulation model at the EU level which was endorsed before the crisis emerged in the scenario. However some of the accounts were under the opinion that reversal of the measures of austerity taking the current circumstances into account will only tend to trigger the spending in public expenditure, wages as well as consumption as that would compress the level of aggregate demand through reductions in those levels of spending. The resultant will be deeper recession within the Euro zone. The rising opposition against the measures of austerity put serious doubts on the long term political sustainability. The detrimental effects of the measures in the long term cannot be overestimated even when the measures were successful. The measures of austerity would be successful in order to generate monetary policy but the social inequality will get deepen as the result of the measures. The intensity of the crisis encountered by the Euro zone will get intensified (Vural, 2011, p. 260). The government of Austria announced that the country would be able to hit the targeted three percent of GDP in the year 2011 for the deficit in the budget. The austerity plan of the country includes an anticipated income of more than 1.6 billion dollars from the increase in taxes. The remainder of the plan includes an anticipated cut in spending by 1.6 billion Euros. This type of actions will allow the new investment of 400 million Euros in the fields of research as well as education and projects of energy efficiency. The austerity measures of Bulgaria aimed at reducing the budget deficit at 2.5 percent of GDP in the year 2011 while it was aimed at 4.8 percent in 2008. By reducing the funds to almost all the ministries of the government the plan aimed to reduce the spending by about 584 million dollars in the last year. The public sector jobs would get reduced by 10 percent and the wages will be fixed for three years. The country of Denmark aimed at reducing the government spending by 4 billion dollars in the course of three years which would lower the deficit to less than three percent of ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Global Economy: an Austerity Measure Coursework”, n.d.)
The Global Economy: an Austerity Measure Coursework. Retrieved from https://studentshare.org/business/1452397-the-global-economy
(The Global Economy: An Austerity Measure Coursework)
The Global Economy: An Austerity Measure Coursework. https://studentshare.org/business/1452397-the-global-economy.
“The Global Economy: An Austerity Measure Coursework”, n.d. https://studentshare.org/business/1452397-the-global-economy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
Global economy
...?Running Head: Global Economy Global Economy [Institute’s Global Economy Examine the opportunities for multinational companies to shift resources around the world and the implications of this for nation states Multinational companies (MNCs) are business giants, which find benefit in operating across the globe. Thus, they will be on the lookout for any beneficial opportunities available anywhere in the global economy (Dunning, & Lundan, pp. 12-15, 2008). Currently, it is apparent that these MNCs find benefit in shifting their production to developing countries, as companies outsource their work to...
10 Pages(2500 words)Essay
Global economy
...? GLOBAL ECONOMY by 16 January Global Economy Discuss the impact of ‘quantitative easing’ in the United s on both the domestic economy of the US and the global economy. The word combination “quantitative easing” has already become the definite feature of the contemporary economic reality. Quantitative easing seems to have become the measure of last resort, when countries, including the biggest powers, are no longer capable of restraining the rapid expansion of the financial and economic crisis. Whether quantitative easing is an effective measure of stopping deflation and encouraging lending is difficult to define. Nevertheless, the end of 2010 was marked with the U.S.’s decision to throw additional money into the domestic economy... to be...
10 Pages(2500 words)Essay
Global Economy
...PORTFOLIO OF SEMINAR WORK INTERNATIONAL PRODUCTION AND GOVERNANCE Table of Content UNIT GLOBALISATION 3 UNIT 2: IDEAS SHAPING THE GLOBAL ECONOMY 6 UNIT 3: A HISTORICAL PERSPECTIVE OF THE GLOBAL ECONOMY 9 UNIT 7: LEARNING FIRMS AND THE KNOWLEDGE ECONOMY 13 UNIT 9: WORKING IN THE GLOBAL ECONOMY 17 References 21 Nayyar's discussion on globalisation analyses the historical trend in relation to its implications for development. A picture of globalisation during the 19th and 20th century...
18 Pages(4500 words)Book Report/Review
Global Economy
..., announced that it would no longer be shipping oil to countries that had supported Israel in its war with Egypt and Syria in 1973, it triggered an international calamity known as the Oil Crisis of 1973. The Yom Kippur War – as the war between Israel and the joint forces of Egypt and Syria in 1973 is now known – inadvertently led to a global economic crisis OPEC members and Arab oil producing states used their economic leverage to embargo the West. Oil shipments to the Western world stopped and this was aimed at causing specific damage to the economies of the United States and its allies. Petrodollars, meaning money earned by Middle Eastern countries through the sale of oil to the West were re-invested...
10 Pages(2500 words)Essay
GLOBAL ECONOMY
...(Hirst 2002). The four Tigers first had a strong foreign funding especially from the USA that gave South Korea and Taiwan a strong support. It was due to its geopolitical interests in the region while the ASEAN four countries mostly depended on financial policies; government funding and remittance’s from their economies to further develop their economy. They differed in the source of funding. ASEAN 4 countries mostly relied in export of lower categories of value added goods that have slower growth like apparel clothing, organic chemicals, but have slowly grown into electronics, telecommunication equipment and machinery especially Malaysia and Philippines. It is in contrast to 4 Tiger nations that have a...
1 Pages(250 words)Essay
Global economy
...and regulation among others. Secondly, more information on the advantages and disadvantages of the race to the bottom needs to be incorporated. Thirdly, although the history of the concept has been given, this discussion is brief. More information needs to be added to make the reader fully understand the history of race to the bottom and how several scholars and researchers have defined it. Finally, the article needs to discuss deeply how international bodies such IMF and WTO have contributed and/or hindered the race to the bottom. The concepts covered in class and those relating to globalization have been partially incorporated in the article. For example, some of the key concepts covered include: free trade, working...
1 Pages(250 words)Assignment
Global Economy
...problems (Markusen, 2004). However, in recent times, rise in non-tariff protectionism leads to amid global uncertainty, mainly in emerging economies themselves. According to the World Bank reports of 2012, creeping effect of such protectionism is prominent in countries like Argentina, Brazil and Indonesia where the countries are interested in appointing other indirect policies to control free commerce between countries. India, Brazil, China, Russia, Indonesia and Argentina constitutes for more than half of the non tariff measures imposed worldwide (Collins, 2013). These governments are restricting imports through upgrading product standards (Indonesia), tightening technological...
8 Pages(2000 words)Essay
Global Economy
...ID Number: Global Economy Question Dani Rodrik is considered to be a well-known critic in context of international order. His views are centered towards holding on currency value when financial capital position is not strong. Dani Rodrik stated that those countries are rich in terms of capitalism who has erected a wide range of formal institutions. There exist third party enforcements where rules are set by governmental apparatus. He outlined that an economic development is dependent on its maximum share of resources which belongs to public sector. Dani Rodrik clearly states that economic position is enhanced through entering into international markets and taking pre-emptive measures in...
10 Pages(2500 words)Case Study
Global Economy
...of complying with high economic interests and trade in terms of capital, labour, etc. On the other, globalisation as liberalisation denotes the mechanism of abolishing or diminishing government—enforced constraints on flows of people, capital, services, and goods between countries so as to build a ‘borderless’, ‘open’ global economy. Such measures are to enable global economic convergence. In order for the flow of capital, people, goods, and services to be successful, it is essential to remove barriers on trade, capital, foreign exchange, and so on. Such demand is political. In the meantime, the concept of globalisation as Westernisation has become widely popular among...
12 Pages(3000 words)Essay
Global Economy
...GLOBAL ECONOMY: BRETTON WOODS Table of Contents Table of Contents 2 Introduction 3 Criticisms against Bretton Wood s: 3 Importance of Bretton Wood institutions: 6 TRIPS and Bretton Wood institutions: 8 Conclusion: 10 Reference List 11 Introduction The financial structure of the global economy is monitored by Bretton Wood organisations. The Bretton Wood organisations were formed in the year 1944 in order to manage the chaotic situation of the international economy after the World War II. The Bretton Wood organisations were mainly focused on developing a common platform for the nations of the world in order to facilitate international trade and commerce...
10 Pages(2500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Let us find you another Coursework on topic The Global Economy: an Austerity Measure for FREE!
Contact Us