Macro & Microeconomics 2) The U. S. economy experienced tremendous growth in the early 1990’s due to the Internet. The economy began to pick up as most things could be conducted electronically. This opened up a whole new sector of jobs, but it also led to a weakening of the economy. When Wall Street was positively impacted by the technological- based economic boom, many investors flooded the market hoping to get in on a piece of the action. However, the economy could only sustain this for so long. Inevitably, when the economy went bust around the year 2000, many people got caught out.
George W. Bush should have been aware of the consequences of the fallout from this bust. Many Americans had taken out home loans that they could never afford to repay, but George W. Bush said that it was positive that so many Americans were purchasing their own homes. Once a significant number of Americans defaulted on their loans, this caused the economy to collapse. George W. Bush should have foreseen the consequences of decreasing interest rates and increasing home loans. 4) The WTO (World Trade Organization) is an international organization that regulates trade among member nations.
Their goal is to help importers and exporters conduct their business in a timely and cost-effective manner. The WTO came out of GATT (General Agreement of Tariffs and Trade). Originally, the ITO (International Trade Organization) was supposed to be GATT’s replacement. However, this never came to pass. Many of the protesters at the “Battle for Seattle” in 1999 were concerned about the effects that increased international trade would have on America. The prime concern of these people was that free trade would result in many Americans losing their jobs.
The differences in opinion between developed member nations (EU, USA, and Japan) and developing countries (China, India, and Brazil) are largely over agriculture. The purpose of the Doha Round on negotiations is to lower trade barriers, which will increase international trade. Because much of the world’s population depends on agriculture for their survival, this is a contentious matter. International trade rules should be reformed so that poorer countries have more control over trade laws instead of having them dictated by developed countries. 5) When talking about capitalism as a “system of representations, ” Hernando de Soto meant that information in a property system is what is its true value.
Property rights are important because it is something that can truly be measured. Many Latin American countries do not have property systems, and so cannot experience economic growth. The legal and economic structures have not been put in place that would allow property to be used as capital. Property rights are extremely important in a growing economy because it is one of the key indicators of a functioning economy.
Developed countries already have these things in place, so poorer countries are at an economic disadvantage in that respect.