If U.S. Sneezes the World Catches Cold

If the US economy sneezes the world catches cold- There has been an intriguing controversy of bombarding between the United States and the economists. The US bombarding countries like Iraq and economists bombarding us with speech such as week US economy, recession, decoupling, stronger emerging economies etc. So, to analyze the above proposition we ask the inquiry is joined states economy is really the godfather of all economies of the world? To answer this question we consider two aspects 1.The GDP and exercise expenditure of U.S. 2. backup Balance and external debt of U.S. For some time now we puzzle been eulogizing the emergence of chinaware and India in the world economic forum. except the GDP of China is at $3.3 Trillion and that of India is 1.1 trillion. The GDP of us stands at a staggering $13.8 trillion (World Bank estimates). until now at purchasing power parity (ppp) or exactly the law of one price-U.S. GDP is double of that of any country. In point the U.S. and European Union together correspond to well-nigh 45% of worlds GDP. Now, take into account the fact that by nature Indians and Chinese are savers. The household national savings in India is about 23% and China to a greater extent(prenominal) than 25% significantly less than the U.S. The marginal propensity to exhaust in India is .65 while that in U.S.

is about .9. Thus, if we calculate the consumption expenditure then Indias total consumption would be about .7 trillion, Chinas 2 trillion and that of U.S. more than 10 triilion. Now lets consider the economics of the trade dynamics of U.S. US has a high trade deficit. It is a wampum importer of goods. 50% of its total imports come from countries such as China, lacquer and germany.U.S. has a trade deficit of 20 million with China, with China exporting large amount of manufacturing, engineering and finished goods. India is a vast exporter of services to the U.S. U.S. is also a huge debitor in the world market. Of the total external debt floating in the world, 22% of that... If you want to get a full essay, coordinate it on our website: Orderessay

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