International Monetary Fund (IMF) The International Monetary Fund was created for promoting and stabilizing global financial relations and plays very important role in influencing economic policies of its member countries. Whenever financial crisis anywhere in the world, IMF is in the limelight. Stiglitz’s Globalization and its Discontents provides great insight into the International Monetary Fund’s role in an era of globalization and how . Did IMF’s intervention worsened the East Asian financial Stiglitz has been particularly critical of the International Monetary Fund’s handling of the East Asian crisis. Stiglitz highlighted five major mistakes that contributed to worsening the situation in East Asian countries.
First of all, from financial crisis to the economic level, a direct impact on exports. In the field of economic upheaval brought people psychological change, they are increasingly losing a sense of security. John Lipsky (2008) said, “it is conceivable that the harm of it how much deep is the people of the world must face a major challenge”. The financial crisis has a direct impact to the individual life. Inflation, business failures, economic difficulties to reduce people's ability to pay, this not only makes the increase in the number of people cannot afford the mortgage,
As such businesses also made endeavours to eliminate competition and gain more profits, this has become more destructive on a wider scale. Take the economic crisis in the US in 2001 as an example. Even as the United States began to feel the onset of a recession that is due to crisis of overproduction coming on in the middle of 2001, the economic and political leaders respond by attempting to encourage people to spend more. Because the entire industry has over estimated the consumers demands, we can see a distinct evidence of over production. This had led to dominant companies trying to consolidate losses and maintain profits,but that would form a chain reaction creating more economic losses which would only make the matter even worse.
Introduction The rising International commodity prices continue to put pressure on global inflation, and with growing China’s economy, the huge demands from China is considered to be an important reason to push up the international commodity prices. According to researches using FA-VAR method to build a complete macro-economic model with multi-variables, suggesting that: Firstly, the increase of Chinese demand is a significant factor of the rising international commodity prices; Secondly, The rising of China's interest rate, RMB/USD FX rate would restrain the international commodity prices; Third, the RMB exchange rate and interest rates will have a significant impact on international commodity prices, but the effect of the interest rate
However, According (Saleem, 2015) when 1MDB’s debt troubles first emerged, it was framed as a political issue as it was mostly highlighted by his opponents. When the politic is unstable, this will affect the economic status and influence the investment form foreign country. 2.2.2 Economic Economic factors include economic growth, exchange rates, interest rates, inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a bank cost of capital and therefore to what extent a business grows and expands.. For example, according (Saleem, 2015) the ringgit’s rapid decline and worsening global economy that impact investors and consumers to make an investment in the country will define as the economic issue.
The term Globalisation is a buzzword emerged in the 1990s and refers to trend of variety of political, social, Cultural consequences resulting from technological changes that are currently transforming the world. Many commentators however focus upon economic aspects upon economic aspects of Globalisation. Sociologist feel that though the economic content of`Globlisation cannot be neglected but its socio- cultural dimensions also requires emphasis. Sociologists argue that Globalisation refers to both the compression of the world and the indemnification of consciousness of the world as a whole. Due to the influence of modernisation and globalisation there has been definite change in the family structure and the original structure of the family
Introduction The term volatility shows that how quickly and how much investment, market structures changes. Fluctuations and volatility in GDP and other key macroeconomic variables is a serious restriction on development which makes planning more challenging and makes investment more uncertain and risky. Developing countries generally suffer from a high degree of uncertainty as compared to the developed countries because the GDP growth, exchange rate and other macroeconomic indicators are more volatile in developing countries. The consequences of this volatility or uncertainty upon economic growth, investment and trade etc. are gaining attention in economic literature.
Negative Effect To whole economy, the rates of high inflation rates are observed as adverse. Effects of inflation are market inefficiencies, and create complicate for firms to plan long-term finance. Inflation can serve as a burden on productivity as organizations are compelled to change resources away from products and services for targets on profit and losses from inflation of currency. Concern about the power of purchasing in future of money depresses investment and saving and inflation can charge hidden tax raises. Higher inflation in one economy than another will lead to the exports of first economy to become more costly and impact the trade balance in trading internationally Positive
The government by lowering interest rates and printing money can fuel inflation ultimately leading to a bubble. Investors are encouraged to borrow from banks and invest in assets, like stocks and real-estate. As a result demand exceeds the availability of assets, which in turn causes an “asset-price bubble”. Therefore, lenient government policy relating to credit and money supply very often fuels a financial bubble. “The classic explanation of financial crises, going back hundreds of years, is that they are caused by excesses — frequently monetary excesses — that lead to a boom and an inevitable bust” (Taylor, 2009).
For the last century, globalization has such a huge impact on countries in term of politics, economics and cultures. Pros and cons are rising along the process, including its impact to socio-cultural, the most significant one is the decrease of traditional civilization values which has been influence by the elements of the west. This of course led to various amount of negative impact of globalization, in today 's fast-moving world, it can be difficult to handle on what 's happening with global interconnectedness, and to sort out the complex ways in which it influences the well-being of the nations and people involved. Also in deeper analysist we can find that terrorism is also one of the result of globalization, the term “global terrorism” means the phenomenon of terrorist operating in and against several nations