Evaluate the impact of global recession on international trade and investment with respect to the country of your choice. Support your arguments with the use of relevant examples whenever possible

Résumé du document

We assume that prosperity is indivisible and that growth to be sustainable must be shared. We believe that the only sure foundation for a sustainable globalization and increasing prosperity for all, is an open economy based on market principles, effective regulation and stronger global institutions.' This statement reflects the commitment of leaders of major global financial powers to change the dominant ideology of ultra-liberalism. The subprime crisis is causing this general questioning in business operation. But first what is meant by crisis? The economic crisis is a sharp deterioration in economic conditions of a country or geographical area, the result of a mismatch between supply and demand, followed by a contraction of economic activity that opposes expansion. In 2006, the US was struck by an unprecedented housing crisis that saw millions of people homeless. Economic recession is a general slowdown in economic activity. The transition from a normal state to a situation of recession is done by an economic crisis. According to the economist Julius Shiskin, one of the effective means to determine a recession is to observe if the GDP growth decreases to consecutive two quarters or more. The recession is a contraction of the economy and not confined to one sector, it is visible in real income, production, employment, and other indicators. The national bureau of economic research (NBER) believes that domestic production and employment are the primary conceptual measures of economic activity.

Extraits

[...] In mid-October 2008, the Baltic Dry Index, which assesses maritime activity, dropped 50% in a week when the credit crunch made it more difficult to obtain letters of credit by exporters. In February 2009, The Economist announced that the financial crisis had led to a crisis of industrial production. In March 2009, the British newspaper Daily Telegraph reported that from January 2008 to January 2009, industrial production had fallen from 31% in Japan in South Korea in Russia Brazil 14% Italy in Germany. [...]

[...] This, theoretically, increases the pool of money available to potential homeowners. A few days later, Lehman Brothers fell into bankruptcy, while the Treasury flew to the rescue of AIG, the largest insurer in the country. Lehman collapse causes a panic on Wall Street and the government is forced to improvise a rescue plan for banks, with a fund of 700 billion dollars (equivalent to of U.S. GDP). But the slump on Wall Street becomes a global financial crash. US Automotive sector The automotive industry is also a key indicator of the U.S. [...]

[...] This recession is seeing private consumption fall for the first time in nearly 20 years. This indicates the depth and severity of the current recession. Consumers in the U.S. have been hit hard by the recession, with the value of their houses dropping and their pension savings decimated on the stock market. Fannie mea and Freddie Mac Bailout The U.S. financial sector is at the root of this economic crisis is clearly the most affected by the events from the recession. [...]

[...] In one year the building permits in the United States reached a decrease of The United States is the sector of information technology reflecting the largest decline in the second quarter of 2009 with only 72 transactions for a total investment record low of 287 million dollars against 144 transactions last year a total of 861 million, a decrease of 67%. In a still uncertain economic climate, investors remain cautious. Traditional sectors like information technology and real estate are not as attractive as they were in terms of investment. III) Finding and recommendation on how to respond to the global recession From the global recession economic that all countries go through, plan to revive the economic activity is necessary. [...]

[...] Signs of malaise are obvious: the collapse of sales, plant closures, layoffs. The Big Three; General Motors, Ford and Chrysler, fear of bankruptcy. In 2008, sales of American giants have collapsed by 45%. Its unsold stocks accumulated. In addition, pressure from contractors who ask to see their bills early so honored. The U.S. president has announced and confirmed that he did not exclude the troubled automobile manufacturers General Motors and Chrysler file for bankruptcy to restructure. The decline in growth in the United States has already generated braking visible imports from the United States and exports to the United States, except so far as regards China. [...]