THE GLOBAL ECONOMIC CHANGES
Theworld economy is controlled by both national and internationalmarkets. The market involves people or organization with needs, wantsand willingness to sell and buy. A government engages its citizens inraising revenue and also the international community. At the sametime, economic growth is fostered when the governments encourage andsupport the private sector.
Overthe decades, the global economy has faced mixed growth and fall. Theeconomic fluctuation was greatly influenced by the ever-changingeconomic policies and models. Dating back to the periods of World WarI and II to the Cold War era, important political decisions haveimpacted either positively or negatively on the markets (Haynes J.,2012). For example, following the Bolshevik revolution of 1917, theSoviet Union leaders established the centrally planned economy. Thisput them in virtual control of the international market. In a measureof retaliation, the West had the Laissez-faire economic policy.
The massive stock market collapse of 1925 downplayed the idea of theLaissez-faire policy. The world had to heed the calls of economistJohn Maynard Keynes of venturing into massive spending (Nayak, S.,2013). In the USA, the masses were called to work as fiscal economicstimulus programs became the order of the day in Europe, Japan, andLatin America. These led to the acceleration of economic growth.
Theperiod after the Cold War left world economy in disarray. The Westand East were suffering from inflation and high unemployment ratioeven though they were enjoying a geopolitical advantage. The Sovietwas no better economic stagnation and malaise were in full force.The USA and Great Britain revived their policies to give room forprivatization of the markets. By the beginning of the 21stCentury, free market ideology started to be felt more than thecentral-planned model (Skousen M., 2015). The world, however, wasnaïve and soon the unregulated market led to the massive economiccrisis in the USA, resulting in the collapse of housing markets, realestate values plummeted and job growth slowed. Now, emerging globalmarket dynamism has seen the BRIC nations Brazil, Russia, China, andIndia present several opportunities to the international market.
Haynes J. (2012), Routledge Handbook of Democratization,Routledge
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Nayak, S. S. (2013). The global financial crisis: Genesis,policy response and road ahead. New Delhi: Springer.
Skousen M., (2015), The Big Three in Economics: Adam Smith, KarlMarx, and John Maynard Keynes, RoutledgeBottomof Form