Global economy involves the exchange of goods and services in the entire world. This entails the activities that are economically carried out by different societies in the entire world. The global economy is limited to the financial part, but it does not take into considerations other non-financial activities. There are other financial activities that are not considered such as the involvement in the illegal trade and the ones found in markets referred to as black. It has been hard to calculate the global monetary unit since in most cases the monetary units are controlled by the governments. This makes it lack a universal unit of measuring the monetary value, hence difficulties in coming up with a single unit to be used worldwide.
While reforming the global economy, certain aspects of the economy have to be considered for the achievement of the desired outcome. Some of these aspects include: the reforms on the fund that is recognized internationally (I.M.F), economic architecture and reforming the global economy. China and India are a good examples of countries that that are developing. Although very poor with their high populations, the two countries forms a large domestic market for the agricultural products of their residents and also for the entire world. Due to the excessive competition to remain the biggest economic hub in Asia, the two countries has grown economically influencing the economic activities in the entire world. Investors have found a fertile area to invest in leading to China being one of the super power countries . In order to have a standard global economy where all the countries will take part without discrimination, reformsin the international trading system must be conducted.
This paper sets out global scenario of state of affairs of different major national economies of the world. The emergence of a global economy indicates or presupposes interconnectedness of the different national and regional economies. The formal opening a global economy was started by formation of International monetary fund soon after the world war. Because of this, giving of surplus resources ...
The global architecturemust be reformed in order to have a stable economic dominance. Not only should the exchange rates be looked into to ascertain a growth, but the entire population’s welfare must have improved. A program may not be said to be successful even if the exchange rates go up without curbing the problem of unemployment. The program enables the governments to shorten the downturns and taking of measures that curb low productions and unemployment. Crisis of finance and currency has been a major problem that many governments try to solve using their budgets. 80 to 100 countries have gone through this misfortune in the middle of the 1970’s (Stiglitz 73).
Therefore, there is a need for research in the international architectureon the finance part of it.
I.M.F has helped in the liberalization and deregulation of policies in the developing countries. These countries had been exposed to dangerous risks which they did not have enough resources to curb. The institution had economical western interests being a harsh economic policy in the repayment of debts. It insisted on financial aid being reduction in expenditure and the interest rates being tightened. Countercyclical policies and imposing of capital controls are some of the major policies that the I.M.F has embarked on. More need to be done in order to help the poor countries and the financial institution should allow the poor country grants as opposed to loans. This is because loans will lead to them being poorer than before.
According to Stiglitz (79), the economic policy should consider philosophy and the social equity and put it as a major point of concern. In most developed countries, wages remained the same for a long period in the last quarter of the century. This was in response to the large disparities in the income distribution with higher earning being the favored lot. This calls for the reversal of the policies to recover the gap between the rich and the wealthy. When this is done, the rich and the poor will earn and have almost an equal purchasing power hence trying to reform the global economy. This will boost the economic position of the poor and the less developed countries, hence reducing the powers with the favored groups. The power would have been political, economical and development associated.
1. "The distribution of wealth and resources in the world is unequal." Using a recent example which illustrates this inequality explain what Christians might do to support the victims of this situation. You should refer to the writing and thinking of the Roman Catholic tradition to illustrate and support what you say. If we look at our world we can see that there are two extremes. The extremely ...
According to Chang (26), there is great pressure on the countries that are developing to use good institutions and policies that were used by the developing countries to be where they are today. It is argued that it is because of these set policies and institutions that the countries developed. These include trade liberalization and patent law investment. Developing countries have to use these tried and tested methods or be imposed on them for a strong multilateral or bilateral pressures from outside. Many argue on the usage of these policies, but the same people are still skeptical that it is the same principals that the developed countries used on their way to being developed. Innovation is an important aspect in global economical reforms since one owns the patent rights which make the individual own a right that is exclusive.
There is a main difference between the ordinary rights and intellectual rights. In ordinary, there are no difficulties in determining the boundaries of the rights unlike in the intellectual where there are problems in determining the boundaries of the rights since it involves innovation on an already existing idea. Countries that allow their citizens to hold both patents leads to higher productivity. Intellectual rights were used in the middle age in England and Scotland, where land belonging to the common man was taken by the lords. Although there was a loss on the side of the common people, the land was put to better use, unlike the overgrazing use by the common people. This is an improvement in efficiency use of the land. This shows how monopolization does not improve on the innovation which is an important aspect in economy of any country which leads to improved global economy (Stiglitz105).
Automobile Industry And World Politics Essay, Research Automobile Industry And World Politics The Automobile Industry has seen sweeping changes in the recent past -Thanks to the entry of many Multinational Companies such as, Ford, Hyundai, Mitsubishi, Daewoo. These Multinational companies have set up their operations internationally not only to cater to the domestic market but also to tap the ...
According to Lee (119), the developed countries did not entirely depend on these policies as argued by many. Many of the rich countries in the world used subsidies and tariff protection to develop their industries. The two countries that is Britain and U.S.A that were supposed to reach the world’s economy summit through the free trade and free market policies did not. They concentrated on the use of subsidies and protection. Britain in particular had been an aggressive country in the usage of activist policies that would develop the industries. The policies were limited in their scope, but the benefit lied in that the country was a pioneer in their usage. England on the other side used to import commodities like wool from poor countries , while also poaching trained manpower.
The rich countries are trying to recommend policies and institutions that they did not themselves use on their way to financial freedom. This is compared to the kicking down the ladder that took them up so that the poor cannot use them. To control this, certain considerations need to be observed, which include the changing of multilateral and bilateral conditions. These are conditions associated with financial assistance to the developing countries. The other consideration is the improvement of home institutions to welcome development. This should be well coordinated since the process is expensive and may result in the opposite of the intended aim. Rules should also be written again to allow developing countries to use tariffs and subsidies for their own development. These countries should also be allowed to make their decisions instead of solely depending on history (Stiglitz 38).
I.M.F has been an important vessel in the development of the poor countries. The financial institution has come up with strategies that aims at helping develop the less developed countries. This involves revising the procedures of helping these countries. It has concentrated on helping these countries with grants as opposed to the loans that were the order of the day. Loans were an additional load on the shoulders of the poor countries and led the countries to be poorer than before. The loans attracted interests plus the initial amount and led the countries to be poorer. Subsidies as brought up by the I.M.F, would help these countries cope with the competitive nature of the countries that are developing. Since these monies would not be refunded, the countries would improve financially and would then be relevant in the global economy.
How Rich Countries Got Rich and Why Poor Countries Stay Poor By Erik S. Reinert The book How Rich Countries Got Rich and Why Poor Countries Stay Poor is written by Erik S. Reinert and it is published in 2007. Reinert is a 62-year-old Norwegian economist who specializes in development economics and economic history (Wikipedia). Reinert attended the University of St. Gallen in Switzerland (where he ...
The gap between the poor and the rich when looked into will enable a country to have a force that has a relatively equal power. This force without disparities would improve trade in the concerned countries. Reforms of this nature in developing countries would in response lead to the development of the economic nature in the whole world. This is one way of reforming the global economy as trade in one country would attract investors from the outside countries. This in return attracts development due to the exchange of finances and trained people who migrate in these countries in search of jobs. The jobs are as a result of development in the internal institutions and the financial strength. The intake of imports leaves the internal citizens with a wide range of products to choose from. More exports than imports leads to favorable terms of trade that eventually leads to development.
Countries that are developing should invest in the improvement of their institutions. These institutions may include the financial, educational and institutions that reflect the status of the country. Care should however be looked into to avoid concentrating much funds on these institutions at the expense of other important departments of production. When these institutions are developed, the operational ways may change which may lead to effective means of production and cheaper ones. This may involve the use of technological advancement in production that results in high quality and large output per capita. The countries may also use subsidies granted to them by other developed countries. Tariffs also enable a country shift from less developed to developed countries. This will lead to reforms in the global economy as these countries will be actively be involved in multilateral and bilateral trade.
Reforming of the global economy is an important practice that directly affects the lives of each and every individual living in the universe. The government should start architectural programs that will look into the needs of the citizens. This includes raising their living standards in creating employment opportunities. The I.M.F has also come strongly in formulating strategies that will see the developing countries being assisted by the developed ones. It has resulted in advising them in giving them grants as opposed to loans. There has also been rampant improvement of institutions in these countries which has positively resulted in development. The reformed global economy will lead to improved living standards of many people and the governments will have an ample time offering the required services to the citizens.
The articles The Amazing Power of Baby Love and A Year to Cheer (written by Dr. Stanley Greenspan and Emily Abedon, respectively) advocate intense coexistence between the child and the caregiver. These articles (taken from parenting magazine) are, in essence, guidelines to be used by the parents or caregiver to ensure proper development of their child up to the second year. The article also ...
Chang, Ha-Joon.Kicking Away the Ladder: Development Strategy in Historical Perspective.London: Anthem, 2002.Print.
Lee, Yong-Shik.Law and Development Perspective on International Trade Law. Cambridge: Cambridge University Press, 2011. Print.
Stiglitz, Joseph E. Making Globalization Work. New York: W.W. Norton & Co, 2007. Print.
Stiglitz, Joseph E. The Price of Inequality. New York, NY [etc.: Norton, 2012. Print.