As the world finally see's a recovery slowly occurring after the recession, some places are looking better than others in terms of projected employment. According to The Economist, the countries projected that have the biggest difference in proportion in hirings and firings are Brazil, India, and Singapore. Based on what we have talked about in class about international trade, this did not surprise me because the economies of these countries rely heavily on imports to markets like the U.S. and the European Union. Therefore, if developing countries like Brazil and India, whose economies are not as stable as the U.S. or EU's, see a drop in demand, their economies falter. This is the same for an increase of demand, and it is due to a lack of a stable economy in times of economic downturn.
The other interesting factor in this graph is that "of the four countries where the outlook has darkened, three are in Europe". This again applies to the financial troubles occurring in Europe at this time in countries like Spain and Ireland.
What does this say about the "world economy"? How does a lack in demand by big markets like the U.S. and the EU effect developing nations economies? What else could account for this major shift in hirings and firings in these nations? How are these developing nations, like Brazil and India, recovering even though the EU is still having financial trouble, lower demand, and it's own bleak employment hirings and firings ratio? That being said, what does this say about the ability of countries like Brazil and India to recover without a major market functioning well?
I certainly do not fully understand the subject but it seems like economies in developing nations such as Brazil and India were able to recover because their economies are not as strongly connected to nations like the United States whose economies have declined recently. So in some ways the economic crisis may have been beneficial to some devolping nations that were able to resume economic activity quickly.These nations which resumed economic activity would then become prime areas for investment in a world with troubled markets.
ReplyDeleteI agree with Preston, I'm not totally positive about all the details, but I agree with what he said. It seems that all the countries with markets set up like ours seem to rise and fall similarly.
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Speaking for India(and I assume Brazil is similar), the market/ economy is no where near the power that it is in the U.S. The U.S economy controls the world, which isn't like India's economy at all. I think the answer lies within there (maybe). If the U.S market crashes, the whole world will suffer because nearly everyone is dependent on status of the U.S's economy, which is why no one will let it fail. While in India, if their economy fails, it won't affect any other country but their own.
ReplyDeleteI agree with Kiran, perhaps it sounds a bit ethocentric, however, the U.S. market does hold a lot of power and influence. Kiran also brings up another good point: if a less powerful country were to have a failing economy, then the importance would only be within that territory, unlike the economy of the U.S., which has a more global impact.
ReplyDeleteI'm not exactly well versed in this particular topic, but what everyone has been saying so far definitely makes sense. While the US is a power house, Brazil and India aren't nearly as connected to the US economy as places in Europe are. This argument seems valid.
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