Latest News Concerning the World Economics and Economic Policy

World economics is the global trade of goods and services in the form of cash. At times, some people refer global economy as the global or international financial system. The rise or fall of the economy is the determining factor for the expansion of international businesses. Consistent stock exchange results in the quick development of the world economy.

Economic policy is the steps taken by various governments in the world to venture into the trade and industrial fields. Additionally, it involves setting heights of interest rates, labor markets, national budgets, tax variations and supply of money. Economic policy is majorly for the thriving of the world economics. Hence, a well set economic policy results in a tremendous growth of the global economy.

Top World Economies

Currently, United States has the best economy in the world. However, its position is lately in a threat by the China’s fast growing economy. The advanced technology, plentiful natural resources, and outstanding infrastructure are the factors that have made U.S feature out as the superpower of the world economy since the beginning of ranking in 1871.

According to the 2017 estimates by the International Monetary Fund’s World Economic Outlook Database, the top ten world economies include United States, China, Japan, Germany, United Kingdom, India, Brazil, Italy, and Canada simultaneously. The nominal rates of the ten economies contribute more than half of the world economy.

China’s Rise and Threat to the World economic Superpower

For the last 30years, the economic development performance of China has been impressive. According to the World financial analysis, China posted the highest gross domestic product surpassing the U.S economy in 2014. Since then, it has been a significant threat to the United States.

United States Financial Plan to Raise Their Economy

The stiff competition from various nations like China makes the U.S economists come up with new unique economic ideas. Currently, they have come up with a strategic plan to improve their economy. The method includes inoculation of capital for the banks to absorb unpredictable losses and to open out Fed’s program to sustain lending of services to the consumers. U.S focuses on maintaining their pace as the economic giants in the globe.

What’s Happening To The World’s Economy?

The world’s economic situation is going through a monumental change, according to economists. The wealthy and powerful nations are not as important on the world’s economic stage thanks to China and other Asian countries. But Asia is not the only fly in the economic ointment. Brazil, Mexico, South Africa, and India are also playing a role in the declining importance of wealthy nations on the world’s economic stage. Emerging countries are more important because they can produce products that cost less. Plus, there is a population explosion in emerging markets.

Economic convergence is the result of technological advancements in emerging markets. Technology is playing a major role in the shift of economic power. And according to Northwestern University’s social science Professor, Robert Gordon the U.S. economy is not as productive as was during the years between 1920 and 1970. The United States had productivity growth from 1994 to 2014 thanks to the Internet, but that productivity is ancient history, according to Professor Gordon.

So what is the prognosis for the world’s economy? One thing is sure. Globalization is not breaking down. It is reshaping itself. By the year 2022, economic output in Asia will be the same as the output in the wealthy Western countries. China’s share of the world’s economic output will jump to more than 20 percent, and India’s output could jump by more than 10 percent by 2022.

The other factor that will shift economic power to emerging markets in Asia is population growth. The share of the world’s population in the wealthy Western countries went from 27 percent in the 1950s to 15 percent in 2015. China’s share is 19 percent, and India’s share will be more than any other country, by the end of 2025. African countries will also increase their population share over the next five years. Africa’s population share could be more than 20 percent by 2025.