Preview

Global Economy

Good Essays
Open Document
Open Document
455 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Global Economy
Conclusion
In this report, it discussed Chinese, German, Greek and American government debts, deficit and GDP respectively. All of debts in these countries are show a rise trend but still have some difference. To give more details, Greek debts shown a continued increase as same as German, while American government debts had a 3 years decline between 1998 and 2001. After the American financial crisis broke out in 2007, it presents a rapid growth trend reach to 102.93(%GDP) in 2011. Chinese shown a top point in 2010, which up to 33.5% of GDP while other years had fluctuated increase trend.

In different countries have different reasons for these situations. In Greece, the main reason lead to the debt increase is high social welfare; the government needs more funds so they issue a large number of debentures. These debentures cause a big financial burden and lead the debt crisis broke out. The social welfare is also one of reason for debt growth in US; another main reason for debts and deficit increase is because US takes many military operation and some counter-terrorism measures,these measure increase government spending. The heavy borrowing to develop technology and other non-developed sectors is the reason leads the government debts and deficit increase in Germany. China used proactive fiscal policy, like China government issued more treasury bonds and invest lots of money or infrastructure construction, these are the reasons conduce to the government debts and deficit change in China.
The government debts and deficit has a close connection with economic growth. The higher government debts de deficit is, the slower the economy growth, it is means government debts and deficit prevent the economy development. In order to decrease the government debt and deficit, the government take some fiscal behavior, for instance, government decrease the interest rate, in order to stimulus the economy. Due to the interest rate decrease, the companies more willing to

You May Also Find These Documents Helpful

  • Good Essays

    Since centuries, the world is divided into rich and poor countries, referred today as developed and developing countries respectively. However since a few decades, along with the acceleration of technological progress, developed countries are witnessing rapid economic development, thus growing wealthier, while the conditions of poor countries are worsening and they are depending heavily on debts which have attained unbearable proportions.…

    • 1074 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    Economic growth automatically reduces deficits by increasing tax revenues and reducing transfer payments like unemployment benefits and other spending. As the economy grows the deficits falls as revenues increase and the debt becomes easier to pay (Sharing the pain; dealing with fiscal deficits, 2010). Conversely, when the economy is in a slump, the government in response will increase spending both in response to increased unemployment and as a matter of monetary policy to invigorate investment. This increased spending is funded through debt the government takes. In many ways, it is similar to how a…

    • 1687 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    Growing Global Economy

    • 585 Words
    • 3 Pages

    Explain the role of technology and big business in the growing global economy of the 16th and 17th centuries.…

    • 585 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Economic Globalization

    • 663 Words
    • 3 Pages

    It is a difficult task to provide a clear-cut judgment on whether economic globalization is beneficial to overall the world economy. We see more states joining the World Trade Organization (WTO). We also see protests where people roaring “down down WTO”. The reason why we see this phenomenon is that economic globalization is a two-edged sword. While providing new opportunities, economic globalization also means risking its own domestic economy. It is important to carefully examine both the benefits and harms of this two-edged sword.…

    • 663 Words
    • 3 Pages
    Good Essays
  • Good Essays

    Canada Global Economy

    • 2696 Words
    • 11 Pages

    Home > Publications and Research > Speeches > Transport and Logistics - Connecting Canada to the Global Economy…

    • 2696 Words
    • 11 Pages
    Good Essays
  • Good Essays

    Hence, China is the largest foreign holder in the United States government debt using vast holdings of trade surplus cash to invest in more infrastructure; expanding state owned enterprises. Until recently, China hit a spark in the nation’s unprecedented pace of double digit economic growth and became a global power ball. The demands for exports shrink tremendously. As the years flew by China though massive state spending and investments may help but the bubble continuously burst. They then created an investment and real estate bubble. China is now desperately trying to wean its economy from massive government spending, trying to attract fast and easy money to sustain their investments and real estate bubble.…

    • 465 Words
    • 2 Pages
    Good Essays
  • Better Essays

    economy and its debts. “A succession of constantly growing deficits had increased the national debt…

    • 1430 Words
    • 6 Pages
    Better Essays
  • Powerful Essays

    Philip Morris International, Inc. (PM) is an American tobacco company that earns most of its revenue from countries outside the United States. “It sells cigarettes around the world - with 40% of its sales coming from the European Union, 24% from EMEA (Eastern Europe, the Middle East, and Africa), 22% from Asia, and 12% from Latin America and Canada.” (Rising Star Portfolios, 2011) In the analysis, we will explore PM financial strategy of being the market leader, the microeconomic and macroeconomic environment and challenges that the company faces.…

    • 1661 Words
    • 7 Pages
    Powerful Essays
  • Satisfactory Essays

    In this project different economics variables will be compared with each other to see if any correlations between them exist to perhaps explain certain trends and changes in the variables. The three focused on in this report are GDP growth, Government Debt and Budget surplus/deficit.…

    • 350 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Fiscal deficits occur when the revenue received by a government is less than spending during a financial year. A rising national debt can happen when tax revenues fall and government spending rises as the economy slows down or goes into recession, or…

    • 760 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    National Debt of the Usa

    • 437 Words
    • 2 Pages

    The highest level of the public debt was observed after the Great American Depression and after the Second World War. Debt was the 120% of the America’s annual income. Then debt was declining when the US and majority of countries experienced a post-war economic expansion. During the next 37 years the national debt was decreasing all time and in 1981 compare to the national income it was the lowest in 50 years. Then it started growth. What happened? The President Reagan became conduct a supply-side policy (It is a policy of reducing taxes in order to encourage economic growth). Next American presidents (except B. Clinton) were continuing the supplying policy and also increased military spending for Afghanistan, Iran and Iraq. George Bush set the record – 1$ trillion in 100 days. Then he left. So, the debt was $10.6 trillion on the day Mr. Obama became a president. The latest calculation shows the debt has now hit $15.23 trillion. It's the most rapid surge in the debt under any U.S. president. President Barak Obama doesn’t supply the supply-side policy, but the debt still growing up. Mr. Obama blames policies inherited from the previous administration of The White House. At the same time Obama chose the way of reducing unemployment It means to make taxes…

    • 437 Words
    • 2 Pages
    Good Essays
  • Good Essays

    Since later 2009, some European countries are impossible for them to repay and refinance their government debt without the assistance of third parties. According to the Nelson’s introduction (2012), on 20th October 2009, the Greek government announced that the deficit will exceed 12% of gross domestic product, far above the European Union’s 3% ceiling. Then, the three major rating companies have cut Greece’s sovereign credit rating successively, and the European sovereign debt crisis first broke out in Greece. Later, Portugal, Spain, Ireland, Italy and other countries continuously reported fiscal problems; major Eurozone countries such as Germany and France also suffered it. A lot of economic professors investigate into the causes of this crisis and give their own opinions; most of them can be related to the accounting activities. The detailed explanation will be illustrated in the following paragraphs.…

    • 944 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    The government during the period from 2007- 2013 developed a strong Fiscal policy stance. In the years Prior to the Global Financial Crisis (GFC), the government decided to take a countercyclical approach to the economy through Fiscal policy as they had seen the unstable increase in levels of spending and the levels of saving. This is shown in diagram 1, government spending was at low point in the previous decade of 31.5 %. In the year of 2008, Australia entered the GFC a severe time of recession in the global economy this marked a period of expansionary policy. This is also shown through diagram 1, which shows the spike in government expenditure to 34.1 % in 2009- 2010. The government started to run budget deficits; this is when expenditure exceeds their intake. In 2010 Australia changed their stance and entered a period of contractionary Fiscal stance to attempt to bring the budget back from deficit to a budget surplus. This change was also brought on by the upcoming federal election, as the labour party had problems with their economic policies in the past. Despite the period of contractionary policy the fiscal stance of the Australian government made little difference on the end result.…

    • 1065 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    Lp 9 Assignment

    • 512 Words
    • 3 Pages

    If a country’s debt rises at the rate of 3 percent which is = 5% - 2%, it will rise. Actually it will double in 23.5 years which is ten times in 78 years. If this continues, the value of currency will decrease and will reduce. With the reduction of currency the country will not be able to make purchases from other counties. Exports and imports of goods and services may slow down considerably or even cease since the country’s currency is no longer of any value to others. A country with very high debt to growth domestic product (GDP) ratio will indicate that the government may not be able to repay a loan or make their interest payments on time which may cause the rating agencies to lower the rating of that specific country. A lower rating may possibly make it difficult for the government to raise the country’s debt as well as making the cost of borrowing higher because the investors may consider purchasing bonds a very risky investment and will expect a higher return on this investment. With the rise of interest rates, asset price decreasing and cutting off consumption may all result in a huge disruption of the stock market which will bring the country into a recession as well as cause a downward spiral of the value of the dollar which…

    • 512 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    Global Economy

    • 1096 Words
    • 5 Pages

    Questions: The New York Times cost $0.15 in 1970 and $2.00 in 2009. The average wage in manufacturing was $3.23 per hour in 1970 and $20.42 in 2009.…

    • 1096 Words
    • 5 Pages
    Powerful Essays