The year 2012 witnessed a sharp slow down in the economic growth. This was mainly blamed on the debt crisis that the European countries had. At the beginning of the year 2012, the world was expecting the debts to continue spreading across the European countries (Grossman & Helpman. 2002). However, it is believed that the European debt can only be resolved completely if the sovereigns agree politically. Some countries have already shown their commitments in resolving the crisis. A good example is the recent changes in the governments of Italy and Greece. The recent integration in he European Union integration can also be said to be a move in the right direction (Grossman & Helpman. 2002).
It is important to trace the causes of all this. Looking for example the world biggest economies, the U.S.A for example has lost its hegemony as far as the world affairs are concerned (Grossman & Helpman. 2002). The U.S.A in the 21st century has seen itself increasingly spending in what can be called foreign affairs. The affairs among others has been the wars against other countries most recently being its intervention to the Iraq without forgetting other issues back at home. The rise of new super powers such as China and India has also greatly challenged the U.S.A stage in the world arena (Grossman & Helpman. 2002).. The US intervention to the Iraq absolutely came with the change of the US foreign policy. Though initially enjoying the political support of its allies during its initial attacks to the Iraq and Afghanistan, with time, the US foreign policy was to face criticism both back at home and away. It was said that the US was trying to gain profitably from the country it attacked through the exploitation of the natural resources of those countries. The fact that the US lost so many of its own soldiers and also innocent civilians in the attacked countries which were in this case called collateral damage shocked the world and more so back at home. A heated debate on whether...
References: Acemoglu, D 2008, “Factors affecting world economy in 2012 .” Quarterly Journal of Management, Vol. 1 no. 3, pp. 055–1089.
Campa, J. & Goldberg, L 2007, “China in World Affairs -- U.S. Policy Choices.” American Journal of Psychology, Vol. 4, pp. 79–99.
Grossman, G. M & Helpman, E 2002, “The Decline of US Power in World Affairs.” Quarterly Journal of Management, 11(7), 85–120.
Hart, O. D & Moore, J 2000, “Recession .” Journal of Political Management, Vol. 9 no. 4, pp. 1119–1158.
Hummels, D., Rapoport, D & Yi, K. M 2001, “Building a World Economy.” Journal of International Management, Vol. 54, pp. 75–96.
Please join StudyMode to read the full document