The Future: - -In this assignment you will develop a two page paper on The future of the global economy; where do you think it is heading - Essay Example

Insert As the world goes into another year in the shadow of continuing economic and financial predicaments, a wider perspective on the contours of the future of the world economy is needed. The trends which are long-term are so clear. Dynamic upcoming markets from Latin America to Asia are increasing prominently. The US and Japan remain vital drivers of the world economy. However, they face key debts and deficit challenges. Europe is passing through a hard and historic process of re-engineering and incorporation.

There is also transformation in the Middle East. Sub-Saharan Africa is breaking through so as to maintain development and thus, building a fresh frontier for growth following decades of stagnation (Wade, 7). The above changes are shaping the future in a positive manner. However, there are still substantial hindrances that ought to be overcome. The world economic recovery is too weak. With over 200 million jobless people across the globe, prospects of creation of jobs are still too low. The gap between the poor and the rich, worsened by the crisis of joblessness, is still too big.

There is a rough road ahead if optimism is to be turned into reality. There are also three mile stones ahead (Wade, 12). First and most obvious is that the crisis has to be put behind the nations, once and for all. This can be achieved through: having monetary policies that are accommodative; adjusting the fiscal policy in all developed economies that comprises tangible plans that are real in order to decrease debt over the medium-term [this does not entail. weakening short-term growth]; finishing up the cleaning-up of the banking sector; and making changes to increase production and potential for growth.

All this ought to be struck by a rebalancing of the world demand to the changing markets, as well as the emerging economies. Possibly, the biggest hindrance will be the great legacy of public debt which by average is approximately 110 percent of the GDP in the developed economies. This public debt is the highest level ever since the Second World War. This also makes the government greatly exposed to subtle shifts in confidence. The same also hinders governments from building institutional and physical infrastructure of the twenty-first century as they attempt to respect social promises.

Honoring the needs of the aging people will increase these pressures (Sivy, 1). Following the end of recession, there have been attempts across the globe to lower debts or to at least slow the increase of debts. Times of major debt reduction limit economic growth and can last for five to seven years. The present deleveraging has been there for four years, and this therefore could mean more years before the economy realizes real growth. Because of the transforming birthrates populations develop bulges.

This bulge of high spirited young people is linked to crime rates and social disorder. Bulges in young people who are in their middle age and real-earnings days encourage economic growth with low inflation. Old people who no longer work but have considerable healthcare requirement are a drag on an economy. Nations such as Japan and Europe already have a bulge of these old people, while others such as China have that of middle age people. Thus, these nations stand to enjoy one or two decades of prosperity before the slowing down of the growth rate materializes.

Nations that have many young people will experience economic growth as the population matures (Sivy, 1). Work cited Sivy, Michael, “Is the Global Economy Slowly Falling Apart?” Time Business & Money, 1.2 (2013): 2. Print Wade, Robert. "The Global Slump." Challenge, 52.5 (2009): 5-24. Print.