StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Global perpective of macroecomonics - Essay Example

Cite this document
Summary
One of the most influential macroeconomic factors capable of changing the entire financial structure of an economy is the nation’s trade balance values. Trade balance, which forms an integral part of the current account balances in the Balance of Payments report of an economy,…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.4% of users find it useful
Global perpective of macroecomonics
Read Text Preview

Extract of sample "Global perpective of macroecomonics"

Download file to see previous pages

The following diagram shows how the current account balance in the US economy had depended upon the trade balances of the nation over the years. Of all the three components of the current account, viz., trade balance, income balance and the transfer payments, the trend in the current account balances of the economy is significantly related to that of the trade balances. Hence, any deficit in the trade balances will seriously hamper the current account balance values of an economy. Since the current account balance determine the current financial asset position of an economy, a depreciating value will imply a poor status of the same that will affect the amount of financial investments into the nation and thus prospects of potential future growth.

The sake of the present as well as the future of an economy is the reason for an appropriate monitoring of the trade balance status of the economy. The US economy at present is suffering from the problem of high trade deficit which must be taken care of urgently. This paper tries to focus on the causes behind the trade position of the nation, the consequences that it has on various aspects of the economy and the steps that the Federal Reserve has implemented in this regard. Trade deficit in USA, as the adjoining table suggest is found to be increasing over the years.

It is also obvious from the table that, the imbalance or rather deficit is primarily due to a hike in the import purchases rather than a fall in exports. There had in fact been a significant increase in exports between 2001 and 2006, but the proportion of imports is found to have outgrown that of the exports within the nation. 1) A trade deficit in the US has often been argued by economists to be an outcome of a savings-investment imbalance within the nation. When the country had been going through a fall in aggregate savings compared to the investment potentials of the nation, other economies had been witnessing just the reverse

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Global perpective of macroecomonics Essay Example | Topics and Well Written Essays - 1000 words”, n.d.)
Retrieved from https://studentshare.org/miscellaneous/1560147-global-perpective-of-macroecomonics
(Global Perpective of Macroecomonics Essay Example | Topics and Well Written Essays - 1000 Words)
https://studentshare.org/miscellaneous/1560147-global-perpective-of-macroecomonics.
“Global Perpective of Macroecomonics Essay Example | Topics and Well Written Essays - 1000 Words”, n.d. https://studentshare.org/miscellaneous/1560147-global-perpective-of-macroecomonics.
  • Cited: 0 times

CHECK THESE SAMPLES OF Global perpective of macroecomonics

How Governments Monetary and Fiscal Policy Affected the Cost of Capital

Specification of Thesis In this paper, the undersigned elected the journal “The Macroeconomics of Financial Crises: How Risk Premiums and Liquidity Traps Affects Policy Options” (Gartner and, 2011) as a subject for discussion as the journal tackles the timely issue of the recent Financial Crisis which did not only raised the cost of capital for companies but also reduced the global economy into a recession....
5 Pages (1250 words) Research Paper

Should We Be Alarmed with Government Debt

Government debt: Should we be “unduly” alarmed?... Is the statement “one should not be unduly alarmed by the size of government debt as it does not need to be repaid because it is only a debt that we owe to ourselves” valid?... Recently, in the Caucasus Research Resource Centre program funded by the Carnegie Foundation of New York, Kyurumyan (2009) took the position that we should not be alarmed on the size of government debts and asserted that incurring domestic debts continue to be a sustainable means for addressing public deficits in the medium to the long runs, at least for South Caucasus....
6 Pages (1500 words) Essay

The economy in California

On the other hand, macroeconomics lays emphasis on factors that an economic entity has little or no control over, especially factors that have a national, transnational or global scope.... In order to understand such effects analytically, this paper is going to discuss the various implications that inflation poses for the economy, with focus on the positive, and, more importantly, the negative outcomes of inflation to an economy....
5 Pages (1250 words) Essay

Business Global Economic Environment & Marketing

The following case study under the title "Business global Economic Environment & Marketing" dwells on various issues and problems that the World Trade Organisation faces that led to the premature ending of the summit in Cancun that resulted in the failure of the summit.... hellip; One problem the World Trade Organisation encountered was the increasing domestic economic repercussions and technical complexity of issues that were being discussed by the summit....
6 Pages (1500 words) Case Study

Macroeconomics: Oil Price Stock

This paper discusses whether the oils price shocks are responsible for both recessions and increases in the rate of inflation and whether we can expect inflation and recessions in world's major economies if the price of oil remains at or above the level reached during the past 12-18 months.... hellip; It is a fact that the oil prices have been spiraling in the last two years and at present it has reached 72 US$ per barrel from 40US$ and it has been major cause for concern in all countries, including so called developed countries....
10 Pages (2500 words) Essay

Understanding the International Economy

This essay represents a contemporary topic about the international economy, its foundations, and roots with regard to the theme of the interdependent global world because the globe has increasingly become more interconnected since the end of the Second World War.... hellip; In understanding the international economy, there are wide reaching implications as well as influences that impact upon it in what is less than a perfect world....
16 Pages (4000 words) Essay

Addressing Unemployment in the United Kingdom

The paper "Addressing Unemployment in the United Kingdom" discusses a worsening unemployment rate in the United Kingdom that is likely one of the effects should a global economic crisis erupt a few months or years down the road.... hellip; In measuring unemployment, the United Kingdom Office for National Statistics (UK-ONS 2009, p....
7 Pages (1750 words) Report

Macroeconomics - Inflation, Disinflation and Deflation

The paper outlines that the global financial crisis has led the whole world to think of taking the radical measures through which the financial situation of the globe can be improved.... The global recession spread across Europe and US has also caused everyone to become indebted....
7 Pages (1750 words) Term Paper
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.
Contact Us