...Accounting College Assignment Chinese Economics in Global Financial Crisis of 2008 Prepared for F.S. Helmut Submitted January 10th, 2014 Ludacris Yu As for the financial crisis of 2008 in the world, which is the most serious economics crisis since the Great depression in 1930s, and caused globalized influenced. Many major economics have had flat and passive development over the last two years. Whereas in China, the economics still have been growing stabilized. According to the Wikipedia “China is the world’s second largest economy by nominal GDP and by purchasing power charity after the United States of America. And it is the world’s fastest-growing major economy with growth rates averaging 10% over the past several years.[1]” The financial crisis also mean a financial storm. The meaning of storm that are the financial indexes such as short-term interest rates, monetary assets, securities, real estate, land prices, the number of business bankruptcy and the collapse of several financial institutions suddenly or short-period deteriorated in the largest number of countries and regions. The financial crisis can be divided into a currency crisis, debt crisis, banking crisis or others. The economic crisis in the year of 2008 was originated in the U.S. Sub-prime mortgage crisis, the development of the U.S. Sub-prime mortgage crisis, which evolved into a global financial crisis. In my opinion, the crisis in 2008 which began to emerge in the second half...
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...transport(passengers demand, economic cycles, current developments) The reports covers the entire aviation industry and will include the recession aspect and its consequences on the passengers demand, the economic cycle and also on the current developments. 1.0 Introduction One of the biggest international industries, the air transport, has the largest sensitivity on the economic crisis. That crisis hit and still continues to effect the populations, industries and economic growth in developed and developing countries. Every sector has been effected by the crisis, every industry has had a reaction and an immediate research for solutions. Instability of revenue and expenditure in the airline industry was effected from the global change. That for is easy to deduce that these reactions are different from each other. This in according to available founds, resources and differences in management. 2.0 Impacts on demand The demand aspect, is a factor that shows us the relationship between population and economic crisis. In fact, the perception of crisis brings different fears and uncertainty in people. Thus leading to an increase of the overall savings, with consequences under the economic factor, with less expenditure incurred by each person. This is one of the things that influenced more directly the airline industry, with a sharp drop in demand. Taking into account only two points is easy to imagine on one hand the airlines in trouble. And their management of this crisis have a fundamental...
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...The global financial and economic crisis 3.1. The global financial and economic crisis has revealed the macroeconomic imbalances and structural weaknesses of the Greek economy. The global economy is in the midst of its most severe financial and economic crisis since the 1930s. The strong turbulence that started in the United States in August 2007 and spilled over to the rest of the world is continuing for the second year running, with occasional episodes of intensification. The persistence of the financial turmoil has caused the global outlook for output, employment and trade to deteriorate rapidly, especially during the last few months. At the current phase, developments in the financial and the real sectors of the global economy form a negative feedback loop, whereby the dysfunctioning of financial markets squeeze activity and, in turn, the fall in economic activity further undermines the capital position of the financial sector and its ability to finance enterprises and households. Exit from this vicious circle will not be easy or fast. The global crisis has negatively affected the Greek economy, especially since the intensification of the crisis in September 2008. The growth rate of the Greek economy, which had been steadily high since the second half of the 1990s, decelerated markedly in 2008, while economic activity is projected to stagnate in 2009. The financial crisis is affecting economic activity in Greece in two ways: on the one hand, the tightening of banks’...
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...From the Asian Miracle to an Asian Century? Economic Transformation in the 2000s and prospects for the 2010s: Review Essay The chosen article, “From the Asian Miracle to an Asian Century? Economic Transformation in the 2000’s and prospects for the 2010s” by Dr. Yiping Huang and Bijun Wang was published by the Reserve Bank of Australia (RBA) as part of proceedings of their annual conference “The Australian Economy in the 2000s” held by Bank's Economic Group. 1.Introduction The article examines Asian economies key transformation during the 2000s and provides prospects for the next decade. In this review essay, I will summarise the article consistent with sections provided by the article and offer appraisal from the economic and political perspective of the proposed prospects. Post significant transformation of Asian economic during the 2000s, the Asian markets is now major contenders in the global market. Their participation in the global market has reached a point where their actions bring global economic impacts of great consequence for the financial, commodities and goods markets. This rapid expansion into the global market brings concerns of potential global economic crisis. 2. Integrated Supply Chains and Dominant Commodity Consumers Past decade reveals integration of supply chains, industrial restructuring and labour allocation contributed to overall Asia market’s GDP growth with major acceleration from China and India. Vertical integration of supply chains with China...
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...Reaction to the Crisis 4 Would prices recover and sustain the pre-crisis level? 6 Fiscal Policy in Piñera’s Government 7 Codelco, the Chilean Company 8 What would Piñera and his finance minister Felipe Larraín do once they were in office? 9 Conclusion 10 Bibliography 11 Introduction The Chilean economy faced a very important challenge when the price of copper dropped in 2008 cause of the global meltdown. Considering Chile is the largest producer of copper in the World, satisfying 36% of global demand, the fast fall down on the prices of the commodity put in alert its economy. Chile has the 28% of cooper reserves worldwide and represents a 14,2% of its GDP and also 57% of its exportations with an amount of U$D 49 billon. Codelco is a Chilean state owned copper mining company, it is currently the largest copper producing firm in the world and produced around 1.66 million tonnes of the metal in 2007, 11% of the world total. According to that situation, the Minister of Finance, Dr. in Politic Economics from Harvard University, Andrés Velasco, acted proactively looking for accurate solutions trying to prevent the effects of the international crisis. The economic crisis of 2008-2014 began in 2008 and it was originated in United States. Among the main factors that caused the crisis were: economic deregulation, high prices of raw materials due to high global inflation, overvaluation of the product, global food and energy crisis and the threat of...
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... Berkley starts his 12th book “Aftershock: The next Economy and America’s future” from presenting well known cause of 2008 economic crisis: ““For too long,” Geithner says, referring to the period leading up to the financial bust, “Americans were buying too much and saving too little.” However, soon it becomes clear that Reich has different point of view what really happened in the wake of the one of the worst economic crisis in world’s history. Author starts his argument by looking back to America’s history and analyzing Great Depression and Great Recession. He is inspired by chairman of Federal Reserve board M. Eccles who was convinced that purchasing power of middle class was reduced by uneven distribution of income. “He draws heavily on his thinking, that the blame lies on a similar but worse economic trauma—the Great Depression—on the vast accumulation of income in the hands of the wealthy in the ’20s, which siphoned purchasing power away from other Americans.” This situation compromised the growth of economy and the economy collapsed. Reich agrees that the stagnation of middle-class buying power has been a drag on growth. “If earnings are inadequate,” he asserts, “an economy produces more goods and services than its people are capable of purchasing.” By studying our past we can see strong correlation between Great Recession and 2008 economic crisis. And we can also find that Reich is confident of the fundamental problem of “broken basic bargain”. I strongly agree, that...
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...The crisis are the European Monetary System that occurred in 1992-1993, The Mexican crisis 1994-1995, the Asian crisis 1997-1998 and the recent global financial crisis 2007-2009. The recent financial crisis has affected the international trade. The financial crisis began in the United States in 2007 in the housing market resulting in foreclosures. The crisis continued to grow and eventually turned into a global financial crisis as well as an economic crisis. As a result, some major banks, insurance companies and investment houses faced bankruptcy while others needed financial aid to continue operating. Many businesses involved in the international trade have been struggling in their financial management during the credit crunch because a business is supposed to remain successfully even during crisis times. The managers in businesses involved in the international trade have had to make decisions to help their organizations stay afloat during the financial crisis. Economists are of the opinion that a financial crisis results from feeble economic fundamentals for instance, fiscal deficit, reduced foreign reserve and increased foreign debt among others. The financial crisis eased in 2009 but its effects were felt globally. The effects on the international trade occur because of the trade links among countries at the global market through a contagious effect (Glick & Rose, 1999). The contagious effect means that when a financial crisis occurs in a country it creates a crisis in another...
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...Introduction In this essay, we will discuss about Asian financial crisis. This crisis happened in 1997. Thailand, South Korea, and Indonesia are the worst countries that affected. There are two views that created the crisis, one is fundamental view and the other one is panic view. Hot money is money that flows between financial markets to get the highest short-term interest rates possible. Capital inflow is increase in the amount of money available from foreign sources for the purchase of local capital assets such as buildings, lands, and machinery. IMF intervention until now still become controversial, two of well-known economist which are Stiglitz and Sachs said that because of IMF intervention the crisis has become much worse rather than before. Moreover, we will discuss about global crisis, this crisis happened in 2007. This started in US because of housing mortgage, and also credit crunch. The difference between Asia crisis and the Global crisis also will be discussed. Asian Crisis Hot money is “Money that flows regularly between financial markets as investors attempt to ensure they get the highest short-term interest rates possible. Hot money will flow from low interest rate yielding countries into higher interest rates countries by investors looking to make the highest return” (Investopedia, 2011). Capital Inflow is “increase in the amount of money available from foreign sources for the purchase of local capital assets such as buildings, lands, and machinery”...
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...1. Introduction To understand into the trend of European currency change nowadays, the origins of the Euro (€) had been studied. From the background of Euro, initial idea for the creation of Euro can be trace back to 1979 when European Union (EU) set up European monetary system (EMS). Due to the successful of EMS, the European Union decided to form the Economy and Monetary Union (EMU) to create Euro in December 1991.The main advantages and disadvantages of a single currency for the countries and the zone had been analysis with the macroeconomics knowledge that has learnt from this course. The advantages mainly help to eliminate the floating exchange rate, transaction cost and price transparency, whereas the disadvantages include loss of sovereignty, cost of Euro and budget position. Thus, the significant influences of Euro dollar from birth to now, it can be known that Euro currency is defined under flexible exchange rate system. With flexible exchange rate, the currency can be effort between the capital movements, tax and subsidize international trade and therefore the currency from overseas will influenced the demand. 2. Analysis 1. History of Euro In January of 1999, single currency, Euro has been introduced by members of European Union. It has been approved by Maastricht Treaty and used by its members currently who called as Eurozone. Those members consists of 16 members which are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg...
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...Impact of the Asian Financial Crisis in 1997 and effect to Latin America Name: Institution: Date: Abstract In 1997, the Asian Financial Crisis spread rapidly all over the Asia and affected almost all the economies in the world. Prior to the Asian Financial Crisis, the Asian countries such as Thailand, Malaysia, South Korea, Indonesia, Hong Kong and Singapore experienced a remarkable growth in the economy that was considered the highest in the world. These Asian economies increased by a notable proportion of 6 to 10 percent annually in the GDP. However, what had been regarded as an Asian miracle seemed to crumple down rapidly 1997 when these Asian countries were faced with a severe financial crisis in their local stock and currency markets. When the economies started recovering from the crisis in 1998, the stock markets in several countries had considerably lost more than 70 percent of their worth, while their currencies depreciated in comparison to the US dollar (Pettis, 2001). The Asian Financial Crisis also affected several nations in the Latin America as they experienced a relentless economic meltdown that had detrimental effects to the economies. For instance, the financial crisis force multinational firms to close down due to liquidation, the banking system deteriorated and this forced high levels of lay-offs leading to unemployment. In addition, the financial crisis resulted in the loss of the people’s purchasing power in the Latin American while nations turned to...
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...impacted by the financial crisis. The financial crisis puts a halt, or decreases the amount of innovative construction of new projects being brought in. The Water Sewage Department and the Economic Security Department are two departments that will be impacted by the crisis at hand. The crisis will have more of an impact on the Economic Security Depart than the Waste and Sewage Department. The Economic Department handles many programs that can produce federal funding, and more resources. The only thing in order for the government to sign off, and invest in those programs it would cost money. These programs could bring about light to the financial crisis, but it could do it by putting the town in debt, which is not needed. The only way to minimize the impact of the crisis on the Economic Security Department would be to allow it to have a small substantial place in the town budget. This would be in the budget, to make sure there is no debt, and hopefully bring in revenue that can make other necessities in the town. If the program does what it should and bring additional federal resources, than it could grow from within it’s own program. The Waste and Sewage Department has a project that cannot be taken off of the table, so room as to be made for it in the town’s budget. The more the town budget is followed to the letter, and the balance of reconstruction, and revenue coming it the town should make it out of the crisis. This could be harmful to and worsen the crisis, because this project...
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...THE ENDLESS CRISIS REPORT Introduction The Endless Crisis was written by John Bellamy Foster, the editor of Monthly Review and professor of sociology at the University of Oregon collaborating with Robert W. McChesney. The article came originally from the introduction of the book called The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the United States to China. The Great Financial Crisis and the Great Recession began in the United States in 2007 and quickly spread across the globe, which appear to be the turning point of the world history. The recovery plan was set to two year, however the world economy five years after crisis is still in the sluggishness. The Traid – United States, Europe, and Japan remain caught in a slow growth condition, financial instability, and high unemployment rate. As a consequence, the effects spread globally. Despite the slowdown of the global economy, China is the only country found out to be a bright spot as its economy is still expanding. Different views on the Stagnation In the United States, the focus of financial crisis shifted to the idea of economic stagnation. The idea of stagnation was introduced by authorities and published books as follow. Firstly, Ben Bernanke, chairman of Federal Reserve Board said on his speech in 2011 that the stagnation was not affects only the United States, but the global economy as a whole. He moreover stressed that he do not expect the long-run potential growth...
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...quoted that the net increase in debt in 2013 is expected to be €48 billion (HK$480 billion) and the gross issue of public debt €207.2 billion (HK$2085 billion). These are large sums compared with Spain’s GDP of €1.05 trillion (HK$10.69 trillion) 1. Figure 1 Source: Banco de España, General government liabilities. Excessive Deficit Procedure (EDP) debt, 11.6. Debt according to the excessive deficit procedure (EDP) and financial assets held by general government; http://www.bde.es/webbde/es/estadis/infoest/a1106e.pdf ------------------------------------------------- 1. Pedro Schwartz (2013), The Welfare State as an Underlying Cause of Spain’s Debt Crisis, Cato Journal, Vol. 33, No. 2 Actually before financial crises, Spain had experienced a long period of high economics growth. At the end of 2007, the fiscal position of Spain performed excellent. According to Eurostat, it was better than in the other three largest euro area member states Spain had a consolidated total government budget surplus of 1.9 percent of GDP, the third highest after Finland (5.2 percent) and Luxembourg (3.7 percent). But in fact it produced internal and external imbalances, which is a bubble. First, real interest were close to zero or even negative and at the same time householders wage grows with inflation rate, which made them think it was a good time to buy the house, but it also made the banks think it was a good time to give the mortgages. As a result, according...
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...India and the Global Financial Crisis What Have We Learnt? 1 - Duvvuri Subbarao _________________________________________________________ Thank you for inviting me to deliver the 2011 K R Narayanan Oration. It is an honour to which I attach a lot of value. President Narayanan 2. Late President Narayanan was a distinguished diplomat, a reputed parliamentarian, a capable minister and above all an erudite scholar. Born at the very bottom of India’s social pyramid, he rose on to occupy the highest office in the country with no assets other than hard work, integrity and humility. ‘A working President’, as he described himself, he never allowed dogma to overwhelm his beliefs and convictions. 3. President Narayanan was in office from 1997 to 2002, a time when globalization, as we are experiencing it in the current times, was taking root. At the banquet he hosted for the visiting US President Bill Clinton in New Delhi in March 2000, President Narayanan remarked: “Mr. President, we do recognise and welcome the fact that the world has been moving inevitably towards a one-world... But, for us, globalization does not mean the end of history and geography, and of the lively and exciting diversities of the world.” This was a thoughtful remark. As much as globalization may be inevitable, history and geography need not be destiny. If we learn the lessons of experience, we will not repeat the same mistakes. This indeed is the topic for my 1 K.R. Narayanan Oration by Dr. Duvvuri...
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...What are the causes of the global financial crisis? Name: Course: Tutor: Date: What are the causes of the global financial crisis? Introduction Achieving stability has always been the number one priority in any county or organization. Financial stability is probably one of the most sort after achievement everywhere in the world. When a country or company fails to attaining financial stability then things are deemed to go wrong. The global financial crisis brought about the worst kind of financial instability in the global economy. It started in the United States and spread all over the world like wild fire. Even the top performing economies in Asia like China were not left out. This economic turbulence brought about both economic and social hardships (Helleiner,1994) . This was partly blamed on the already established Capitalist ideologies that prevailed especially in the United States. This crisis exposed most economies to financial difficulties as it proved the dependence of most nations on dollar denominated financial transactions. The only way to salvage these economies was through fiscal and monetary interventions by the Governments of the day. Bail-out packages were presented to major economy drivers and industries to help ease the financial crisis that had affected their operation. The collapsing of large financial institutions like the Lehman Brothers bank brought about a lot of chaos in the industry. Large bailout packages were used to help revive...
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