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Business Economics - Essay Example
Author : botsfordarchiba
Finance & Accounting
Pages 6 (1506 words)
Business Economics US economy is still under the curse of the financial crisis that led to bankruptcy and widespread unemployment. The crisis refuses to die down as USA is unable to repay its debt. The economy is already caught in the debt trap. Rating agencies have assigned low ratings to the US economy owing to the crisis…
Euro crisis is supposed to result in negative growth for the next upcoming six months. Apart from US, the British are encountering the problem of double dip recession (Winnett, 2011). Currently OECD is giving warning to the US government about an emerging economic slowdown that the country might have to encounter soon. OECD claims to derive such a result from the composite index of the leading indicators. Such alerts have been issued for the seven major economies. It is mostly using CLI instrument to get early signals of downturn from the upswings and downswings within the periodical growth cycle. Such an instrument will surely help OECD to send out early alerts to the economies (Major economies globally heading towards slowdown: OECD, 2008). Symptoms for such a slowdown will be continuous fluctuations in business cycles. Such fluctuations will linger for a long period of time. Slowdown in the euro zone will lose out the confidence of investors especially in the financial markets. This could be the main reason behind output contraction in the major economies. United States is already experiencing cyclical slowdowns. Such a trouble had not touched US economy in the last 10 years (Major economies globally heading towards slowdown: OECD, 2008). Preannounced liquidity shocks have been hitting the US economy. ...