globalEDGE Blog - Page 193

Economic bubbles have been a reoccurring economic cycle in the world throughout the history of capitalism. Recent economic bubbles that the world has experienced include dot-com/telecom, real estate, stocks, and biotech bubbles. They date back to the 1880’s when the first railroad tracks were laid down in the United States. The goal was to connect the United States through economic integration and development, which created a boom in the development of canals, turnpikes, railroads, and telephone lines. Many of these projects were funded by the government, and now green technology projects are funded by them as well. Globally, governments are beginning to promote green technologies through loans and subsidies. The rapid growth the world has seen in green technology could be the start of the next big economic bubble.

Exports continue to help grow and expand Michigan’s food and agriculture economy, while generating nearly $2.8 billion in economic activity with support from the nation’s second most diverse agriculture industry, strong public and private investment, and a diversified portfolio for food processing. Exports of consumer food products are growing three times faster than sales in the United States due to the foreign consumers’ growing purchasing power and lower trade barriers. Thus, exporting is vital to Michigan companies as an opportunity to increase sales and profits, as 95 percent of the world’s consumers live outside of the United States. Moreover, food and agriculture producers can reduce dependence on existing domestic markets, and off-set slow sales due to economic changes, demands, and cyclic fluctuations resulting in short and long-term security for Michigan.

Although sending emails is an efficient form of communication for some tasks, bosses are prompting employees to make a phone call when appropriate.  Some managers have gone as far to say that emailing instead of calling can hurt business, hinder creativity, and delay projects.  This issue is especially common among the Millennials, a group defined by people born between 1981 and the early 2000s.  A common belief is that this generation is so accustomed to texting, emailing, and communicating via social media that many of its members are inept at communicating on the phone or in person. 

Emerging markets has become a phrase that incites a lot of excitement. With high growth rates and the possibility of huge returns, investors have flocked to put money in the best performing emerging markets. One of the darling emerging markets over the past decade has been India. The combination of a large landmass, rich with resources, and the world’s second largest population has been the framework that allowed India’s GDP to grow at an average rate of 7.65% a year over the past decade. This well outpaces the United States as well as almost every western economy and has caused investors to salivate at the potential they see in India. Regardless of these extraordinary statistics, recent stumbles in India’s economy has reminded everyone just how risky emerging markets can be.

Starting in 2008, the financial crisis affected most of the countries in the world. Recently, a light of global economic recovery was shed on many of these countries. However, a new challenge aroused in the Asian currency price market. In India, people hope that the government can change a record-low currency trading situation, accelerating inflation. Furthermore, they hope India’s economy can find its way back to the normal path.

The Arctic Ocean has traditionally been covered in ice and very difficult to travel through with a ship. Currently the ocean is travelable for four months a year as polar ice caps melt due to global warming. One country taking advantage of the newly opened route is China. A Chinese shipping company, COSCO, sent a ship from the port of Dalian to Rotterdam in the Netherlands, a 3,380 mile route that would take just over 30 days.

Long before the financial crisis hit in 2009, private debt clouded the economics of developed countries and emerging markets.  Between 2004 and 2009, as seen on this interactive map, shows the private-sector non-financial debt rose by an average of 43% of GDP in the Western countries.  Since then, the public sector’s ledger has taken on the debt burden.  The frequency and amount of government bailouts and fiscal stimuli dished out by lethargic economies sent the ratio of government debt to GDP spiraling.  The Corporate sector have begun to deleverage while Households and Financials are taking on more.  This is especially evident in France, where sustainable growth is expanding in five strategic areas: education, research, industrials, infrastructure, and financial technology.

For decades, free trade has received major support in the increasingly globalized market. of today. To account for the economic effects of free trade, Foreign Direct Investment (FDI) has caught the attention of economists and has become one of the most important components of measuring the economy. Since the Great Recession in 2008, most countries, especially the United States, have been experiencing a huge decline in FDI. However, in certain parts of America, we may see a much needed comeback of foreign investments in the next two years.

A new wave of start-ups are forever changing the way people view the borrowing and saving of money. These financial-technology firms, or fin-tech firms, are gearing away from large corporations, such as Western Union, and are now relying on safe technology to enhance the financial world from the comfort of their warehouses. The many rising firms are reaping in the profits, while simultaneously sparking interest in investors and challenging the institutions that have reigned over the financial world for years.

Harnessing the energy in shale has created a boom in the markets with enough momentum to alter the global energy industry altogether.  The controversial drilling technique involves fracturing shale formations using water, sand, and other (undisclosed) chemicals to access natural gas.  Entrepreneurial potential coupled with technological innovations from both the public- and private-sectors attract investment to either resource rich regions or competitive hedging projects for returns.