Important current events comes to international economy - Essay Example

Effects of International Economies in International Economies William & Wayne (34) outline that international trade mainly entails supply and demand evaluation of global markets. It mainly shows the relationship that exists among consumers, suppliers and even governments. The main aim of international trade is to show the impact of international trade on policies made, corporations and the global economy. William & Wayne (45) outline that international trade affects all aspects of the economy in both the negative and positive ways.

Globalization has led to a lot of changes in the economy of both Europe and the United States. For instance the United States was experiencing economic recession where the dollar lost value and this shook the economy as a whole. Life became expensive for Americans and businesses were greatly affected. This economic recession also affected the relations between the United States and other countries. William & Wayne (345) state that the Europe and the United States are very good partners hence a change in either the dollar and the Euro affects both countries.

This is mainly because the two currencies are correlated hence a drop in value of either currencies will affect the other. The overall fall in the value of the dollar is also blamed on the political decisions that have been made. Political instability in the United States was mainly caused by the difference in political ideologies between the Democrats and the republicans. Racial discriminations was also to blame for the political unrest that led to the overall fall in the dollar. William & Wayne (267) point out that the large economies are interdependent.

For this reason countries should be careful and ensure that the economic is stable enough to attract investors. A lot of investors pulled out from the United States and Europe because of the fluctuations in currencies. For instance China decided to invest in Africa to minimize their losses as the African economy was not affected by the fall in the dollar as Africa is a magical economy (William & Wayne, 209). Local Industries were greatly affected by this recession as America and Europe had to borrow to sustain its economy and this put them into debt.

William & Wayne (459) outline that the United States mainly deals with agricultural products hence it feeds other counties such as Japan among others. On the other hand, Japan is made up of the manufacturing industry this shows that that one country cannot do without the other. In this case the fall in the dollar greatly affected the Japanese Yen. It is therefore important for all economies to ensure that factors of demand and supply are constant so as to ensure stability of currencies. It is important for both the developed and developing countries to understand the importance of supporting their local industries.

This is because the local industries of any country is what drives the economy. According to William & Wayne (355), killing the local industries is as good as killing the economy. The political state is also an issue of concern as it can be used to measure the overall performance of the economy. When the political climate is calm, then trade between countries is enhanced and vice versa. In conclusion, performance of a countries economy affects that of trading partners and it’s also important to acknowledge that countries are interdependent on each other.

Before decisions are made, countries should take into consideration the impact that those decisions will have on their partners. William & Wayne (56) outline the reason why political events of one country is closely followed by the partnering countries. The interdependence among countries is the main reason for this interests. ReferencesWilliam,H & Wayne, R. International Economic Review, Boston: Bianden Publishers. 2011.