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Economic Trends of 2012
By siliconindia
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Tuesday, 03 January 2012, 17:07 IST
Michael Spence-Global Volatility
According to Michael Spence, the economic climate will be marked by instability in various economic and finance sectors which will impose the risk on summative national income, consumption, and investment. It will provide two perspectives to the global environment generating higher risks of international disasters and more concerns on Europe debt crisis, in terms of investment and economic growth rate.
In 2012, Europe will succeed in debt restructuring by accessing private capital derived from new programs on fiscal adjustment and structural reforms obtained from countries like Italy. This is largely supported by European Central Bank in sovereign debt markets regulating the financing needs for the Euro zone which is a challenge for the economic recovery. While on the other hand the Euro zone struggles to keep away fiscal centralization which is going to boost up Europe debt crisis which in turn is likely to disrupt the fiscal stability, thrust on reform movements and capitalization.
On the forefront, Unemployment and economic growth in the private sector declines in US till the presidential election raising a question mark on the fiscal stabilization, growth, and employment structure while public sectors pull away hands of support from investment to aid economic growth stabilization. This will lead the emerging economies to continue to remain in the state of debt crisis which hinders their growth further.
As a matter of fact the whole economic instability and risk emerges from the policy measures taken to aid stabilizing market economy by means of co-ordination with the developed nations. With the expected trend in political system which will continue to upgrade, economic and political situations will turn better.
