Global Economies according to Friedman's The World Is Flat - Research Paper Example

This has allowed other growing economies to collaborate irrespective of the geographical distance separating the collaborating countries. Based on the past and current trends in the U.S. economy, Flanders presents that as compared to some of the ten major recessions that have hit the U.S, those that have occurred in the 21st century have been the worst. This is indication that the in the next five years, another heat is likely to have even more serious impacts on the U.S economy. For instance, the 2000-2001 and the 2008-2009 economic downturns have had some huge effects, especially in major areas such as employment, growth, investment and personal disposable income.

The rate of employment trend has continued to fall over the years with the invention of more new technologies that replaced human labor. Today, the 85% rate of employed men and women in 1960 has reduced to only 64%. This has also been marked by the reduction in the share of all men and women entering the workforce. Subsequently, Flander further explains that from the year 2000 to 2009 the average income per household fell by 3.6% and has continued to fall up to date, especially with an increase in the inflation rate.

Do you believe China will surpass the U.S. as a world economic power? According to Smith, although the United States, Germany and Japan are the greatest economies in the world, most model projections indicate that China and India will surpass some of these huge economies. For instance, Smith points out that as per the Goldman Sachs model projection, the gross domestic product (GDP) of the U.S will rise to $35.1 trillion from $10.1 trillion whereas that of China is expected to rise from $1.4 trillion to a massive $44.

1 trillion. I agree with this idea, especially taking into consideration that during the 2008-2009 economic downturns, whereas the U.S. economy was rapidly shrinking, China’s economy was still growing at a rate of 9% per annum. The recent performance of China’s economy also shows that China is on track towards its long-term goal. For instance, the GDP grew 7.5% in 2001 and accelerated to 8.3% in 2002 and 9.5% in 2003. Moreover, China’s trade links as well as the fact that China is a well known net creditor puts her economy in a good position of becoming one of the strongest economies globally.

 China is also known to be a great buyer of the U.S. bonds implying that to some extent it has the capacity to determine the deficit that the U.S. can run considering the fact that the U.S. is among the biggest net debtors (McEachern). Friedman documents that China is the world’s greatest “offshoring” country to the extent that even the U.S is one of the beneficiaries of the attractive production prices in China. The Chinese education system, with its emphasis on technical areas such as mathematics and sciences, has resulted in a situation where the wages of highly skilled workers in the U.S. are starting to compete against Chinese workers who can do a similar job at a low price.

According to Flanders, one of the latest forecasts by the International Monetary Fund (IMF) reveals that perhaps by 2016 the economy of China will surpass that of the U.S. The forecast predicts that there is a current wrangle of the budget in Washington. This in turn leads to the emergence of a number of questions