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Current Issues: Global Issues: World Economy

In 2009 per capita income and global output declined. This was the first time that this occurred during the post World War II era. The global per capita income declined 2% to $10,500. In addition, global trade decrease around 25% from 2008’s level which was the largest year to year drop since World War II. Unemployment rose from just over 7% to 9% in 2009. Underemployment remained high as well. The global recession was caused by widespread uncertainties in the financial markets, bank closings, tighter credit, cheaper home prices, collapsing asset prices, lack of consumer confidence, and the decrease in

trade. However as the second half of 2009 came, the global economic state appeared to be improving. The U.S adopted a $787 billion stimulus plan while Japan implemented budgetary requirements which included a 12 trillion fiscal spending policy.

Currently, the global economy faces a whole new set of problems on top of the long standing ones. A financial stimulus was implemented in 2009. This plan made it mandatory for countries to run budget deficits. But in 14 out of every 15 countries, government balances progressively decreased. Then in order to pay for additional expenditures, treasures declared a public debt globally which was worth around $4 trillion dollars. Many banks reverted toward injecting currency into the economy in order to continue to keep interest rates low. Currently, inflation is not a pressing concern, however many bank will soon suffer. They will be presented with the task of managing


interest rates low enough that their future growth is secured. Unfortunately, the world also has several long standing issues. Underemployment, pollution, wastedisposal, poverty, water-shortages, , overfishing of oceans, deforestation, depletion of non-renewable resources, health care, hunger, housing, and epidemics are all challenges that the world is facing as population in-

addition of 80 million people annually to a already overpopulated world. Consequently, all of these problems are compounding and causing a greater struggle to solve our global economic crisis.

nology is one option that the worlds economy can invest in which would include its further implementation in fields like medicine, agriculture, communication and energy. But the most popular solution to the global economic state is patience. Many critics urge that it takes time for stimulus money take hold and by 2011 the economic recovery will be a reality.

Possible Solutions: Although there are many issues and problems to be solved, the worlds future continues to look promising. The world has the capability to not only address but to solve these seemingly overpowering problems. Tech-

Dustin Mitchell Ms. Federman Global Issues 5/8/10


Global Economy