Global Economics

Global Economics

Introduction

The United States economy is one of the largest and has the most powerful technology in the world. In today`s market oriented economy, private individuals and business firms are making most of the profits and decisions, and the state and federal governments made the decision for buying goods and services that are needed predominantly in the private market place (WSJ, 2012). Business firms in United States enjoy considerable flexibility than their counterparts in Western Europe and Japan in decisions to expand their local plants, to lay off the surplus workers, and to develop new products and services. At the same time, United States Economy is facing with numerous challenges and barriers to entry into the rivals market place and vice versa. The economy of United States is measured by the Monetary Policy, which devise all kinds of economic and financial policies, and for the purpose of decision making for citizens of country. United States is the largest economy of the world; so it enjoys great dominance and its monetary policy has a significant impact on different countries economic and financial aspects. In this essay, I will be going to analyze the current situation of United States economy on perspective of different economic indicators including inflation, unemployment, interest rates and trade on perspective of different economist theory.

Discussion

Every country's financial and economic aspects are deal with their monetary policy. Monetary policy is design to influence the performance of the economy with the key indicators including the inflation, interest rates, economic output, trade, energy and unemployment. It works by affecting demand across the economy—that is, firms' and people's readiness to spend on goods and services. Beginning with the Classical school of Economic theory there are three factors of production, which includes the land, labor and capital. These factors are necessary for the efficient performance and wealth of the nation. Accordingly, the ideal economy should be the self regulatory market as the United State economy is, which facilitate the countries to automatically satisfy the economic and social needs of the citizens.

Gross Domestic Production is the most significant indicator for measuring the performance of any country. However, the latest indicator of United States economy suggests that GDP will flourish around 2% to 2.3% in 2012, which is much higher than the GDP of 2011 which was around 1.7%. Many economists believe that the pace of the growth is slower due to unemployment rate (Kiplinger, 2012). The current economic indicators suggest that consumers are losing confidence in the debt sector, as the four years savings trends need to restore more on wealth lost in 2008 recession in the housing crash.

Current employment indicator for United States suggests that the job market in 2012 is strengthening, but the overall turnaround won`t be impressive, as the enough job creation will only result in the unemployment rate by the year end to reach at 8%, which is 8.3% in February 2012. The United States economy is creating jobs on average per month of 245,000 from December 2011 ...