In a loose monetary policy environment, therefore, housing mortgage rates also fell, provides opportunities for many investors, promote the prosperity of the American housing years. Also happens to have high risk of financial innovation product offered opportunities in the housing market expand rapidly. Nevertheless, rate cuts do not last long; it will inevitably burst bubble expansion to a certain degree. Sure enough, in June 2004, the fed's low interest rate policy into reverse, interest rates rebound in mortgage rates also rose, mortgage default risk is greatly increased, so cycle, exacerbated by the outbreak of the
The value of the new euro was based on the average purchasing power throughout the currency zone (Morris 2015). The euro gave Greece the ability to borrow based on a currency overvalued relative to the country’s ability to pay. Most countries base currency on the amount of available backing power in the banks; however, the centralized euro allows the country to spend based on the average eurozone’s backing power. This allows Greece to enjoy a higher purchasing power than it previously was able to provide. “In the years immediately prior to and immediately after Greece’s entry into the Eurozone, nominal and real interest rates came down, sharply contributing to high real growth rates” (Dellas & Tavlas 2013).
Income inequality is refers to the unequal distribution of household and individual income in an uneven manner among a population. From the year of 1980 to 2010, we found that the United States has a relatively high level of income inequality which it faced the greatest economic challenge in the over past decades, the economic pie has indicates that there are a relative gap between the richest people and the poor people in the country. Income inequality has surged as an economic and political issues that leads inequality has poses a major threat in the global issues. Besides, Income inequality has become progressively obvious since in the year of 1980. For example, the distribution of income had 30 to 35% of national income
In excess of the 36 hours a month allowed by Chinese law was routinely demanded from Foxconn employees (Fiona, James and Mimi). Of the 100 largest economies in the world, corporations are more than countries (based on a comparison of corporate sales and country GDPs) (Anderson and Cavanagh 3). When the national corporations in underdeveloped countries compete with transnational corporations, they are in the disadvantage position, which makes the economy rely heavily on transnational corporations. What’s more, underdeveloped countries take the risk of cultural invasion which makes them lose the control of cultural and social
Spain, after the collapse of 2008, saw a rise in the levels of personal debt. Although the public debt stood at 60% of the GDP, the problem was due to foreign exposure of private debt. Spanish banks were relying heavily on whole sale finance from abroad. Portugal had a large current account deficit and external debt which was fuelled by private sector borrowing. Greece, Portugal and Ireland were the worst hit whereas Spain & Italy were considered fiscally vulnerable economies.
Japan is the third largest economy in the world. In 1989, Japan faced a prolonged period of economic stagnation, deflation and relatively high unemployment. The economic performance of Japan was limited to weak domestic demand and fierce structure of the labor market, which was a consequence of restrictions of business activities. However, despite the difficult internal state policies, Japanese companies continue to enter international markets. In 2011 Japan had 68 companies that are the world's largest corporations (Fortune/Global 500 CNN money) - Toyota Motor, Hitachi, Honda Motor, Nissan Motor, Panasonic, Sony and Toshiba.
When the global economic crisis occurs, it affects living of all people especially those living in least developed countries. According to a recent report of the United Nations, since the onset of the global financial crisis, developing countries generated much of the global output growth. The group of least developed countries (LDCs) is experiencing a modest slowdown of their economies, with growth rates falling from 5.1 per cent in 2014 to an estimated 4.5 per cent in 2015. Diminished export demand from developed countries, lower commodity prices, net capital outflows, and weak investment growth and, in some cases, military conflicts, natural disasters and adverse weather effects on agricultural output are the causative factor for the slowdown of economy. The global inflation has made living worst in poor nations.
Revenues and benefits go to the wealthy at the expense of everyone else. For instance, the middle class is progressively shrinking. According to White House’s Council of Economic Advisers, the percentage of people who are middle class has fallen from 50 percent to 42 percent. On the contrary, a 2012 report by the Congressional Research Service reveals that the wealthiest 10 percent of households went from controlling 67 percent of the country’s wealth in 1989 to almost 75 percent in 2010. Moreover, this uneven distribution of wealth has contributed enormously to increased poverty and deprivation in the US.
First, the transfer of power from labour to capital soon translated in an analogous transfer of income and wealth within most OECD countries and many developing countries adopting similar policies. The indexes of inequality in the distribution of income started to increase since the late 1970s and continued the upward trend until now. In addition, the increasing inequality often reflected growing poverty also in the richest countries (including the US and many European countries). The neoliberal policies systematically violated the basic conditions of social sustainability during all the period. This failure had a significant impact also on economic sustainability as measured by the growth of GDP.
According to Hamdi (2013, p.142), globalization has positive impacts on many different sectors of developing countries for example the economy, health system, technology and politics. However, there are many drawbacks that can be observed due to globalization. Such as the increased income inequality and global warming, as the result of increased transportation and production ( Borghesi & Vercelli, 2003, p. 78-79). However we will see later on that there are also disadvantages in health and education