The contemporary economic system has witnessed changes from the global economic boom, where there has been transition in the global economic and financial prosperities among countries. However, the former economic boom has gradually changed to the present global crunch that has led to the major financial crisis in US and among the OECD countries. Introduction. The increase in the pace of globalisation in the last 20 years has transformed the nature of global economic relations with relevance to the global trade and financial flows.
The interdependency of national economies on the issues related to businesses and wider environment has improved economic stability and people standard of living across the globe. (London Metropolitan University 2009). Thus, economic globalisation has become the major economic terms, which describes the economic practices in the last few decades and it has been cited as the tangible keyword that will be used to describe business in the next century.
Meanwhile, in the global financial economics, there are key issues, such as emergence of global financial markets; state-owned enterprises and development of euro-zones have largely contributed to the advent of globalisation in the contemporary economic system. (Eun, Resnick 2004). Typically, the 21 century studies have revealed the increasing integration of the global economy, and the improvement of technology that have created rooms for greater connectivity and competitions among business and the global market.
This has greatly enhanced the movement of goods and services across regions and continents. (Oyewunmi 2007). Thus, the effects of the technological advancements cumulate improvement the way businesses are run globally and this has enhanced the potential benefits of improvement of productivity among nations. (Oyewunmi , 2007). Typically, the new efficiency of the new technologies creates the better environmental management and the rights economic blocs. ( Oyewunmi, 2007)
Studies have revealed that despite the US economic downturn, the global economy is still on the track of growth. (Reserve bank of Fiji, 2007). Likewise developed countries, the increase in the global integration have significantly improved the global growth trade of most developing countries especially Asian countries. (World Bank, 2002). The International Monetary fund also reveals in its report that there has been improvement in the global financial system due to the solid global economic growth and buoyant financial markets.
Additionally, the improvement in the balance sheet of many corporate organisations in various countries has also enhanced the fundamental growth of many countries, especially the emerging market economy. (International Monetary Fund, 2005). Thus, with ongoing improvement of many countries, there is also enhancement of credit facilities for various countries, which improve the quality of their debt framework. (International Monetary Fund, 2005). This essay examines the global finance and the economy.