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How Developing Economies Are Impacted by the Global Financial Crisis - Research Proposal Example

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This research proposal "How Developing Economies Are Impacted by the Global Financial Crisis" indicates the need to research financial institutions that are backbones of the global financial sector and they have been playing a very significant role in enhancing the economic efficiencies of the financial sector. The financial institutions offer a unified platform to the borrowers and lenders. All financial…
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How Developing Economies Are Impacted by the Global Financial Crisis
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Download file to see previous pages The global financial crisis which started from the United States emerged because of the diversified risk, in which the supply of capital to real economies is reduced as a result of freezing up of capital markets and the collapse of financial institutions.
Before coming to the current financial global crisis, knowing how a crisis occurs is also important. An economic crisis is simply known as the decline in economic activity for a few months in an economy. The typical measure which shows the decline in the activity of the economy is the decline in Gross Domestic Product or a negative real economic growth rate. When a recession remains for a longer period, it is known as economic depression whereas, when it becomes a severe crisis or hyperinflation, it is defined as economic collapse. There are various theoretical explanations because of which recession extends such as a decline in the confidence of consumers, an increase in the risk averseness of the investors, an increase in the interest rates, the decline in production of firms, falling demand and increase in layoffs or unemployment. A general assumption about recession is that when it emerges from a developed economy then it can transfer to the other states because various economies are dependent on the developed states.
It is interesting to note that the global financial crisis did not have the same impact on all economies and its impact varies from country to country. The overall impact is the downturn in the economic growth, unavailability of capital and worsening of macroeconomic indicators. Most of the economies have been hit by the lowest GDP rates since World War II. The global financial crisis is being considered as a major contributor to slowing down the developed economies. Governments have been trying to develop strategies against the impact of this crisis however; the crisis has spread like fire. The stock markets are highly affected by this crisis and it is suggested that the crisis is still not over. The macroeconomic indicators of the developed countries have worsened. ...Download file to see next pagesRead More
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