Business Economic Essay Example | Topics and Well Written Essays - 4000 words

Business Economic - Essay Example At a general framework, countries measure growth by developments of its gross domestic product (GDP) and by the per capita real GDP (Colander, 2001). The secular growth rate trend of economy is 2.5 to 3.5% and the fluctuations experienced within this trend are called the business cycles that are either at its peak, through, upturn or downturn state (p. 154). Unemployment refers to number of unemployed persons divided by the total number of workforce. Unemployment, whether structural or cyclical, is most felt during economic recession and conversely felt when there are expansions (p. 154). Global Conditions The Internal Monetary Fund (IMF) pointed that recession caused sluggish recovery which morphed countries in an economic quagmire in the 90s to the mid-2000s although hope for growth is placed at European countries. Analysts professed that there is world economic expansion in an annual rate of 51/4% in early part of 2010 however, increasing unemployment remained challenging. There i s also an evident financial setback too, which caused markets instability that consequentially discouraged entry of more investments while there is evident decline of stocks in the market (p. 16). This prompted the European Central Bank’s Securities Markets Program and its European Stabilization Mechanism to initiate fiscal adjustments. IMF further observed that there is reduction of tail risk when Europe redefined their fiscal policies by undergoing adjustments against market demands. It was perceived that if the basic economic weaknesses persist and economic reform is turtle-paced, growth remains uncertain. Further observations denote that while there is increasing activities to improve tax measures, there is also low investments for real estate and slow residential demands amid increasing prices of houses. IMF professed that the quantitative risk is high as distribution of forecasts for the slope of the yield curve is tilted downwards and another upside risks from financia l forecasts toward the second quarter of 2011 (p 45). Macroeconomic Trends in UK As this develops, UK forecasted that its exports will aid growth in the next term. Financial analysts hope that identified downside risks will not happen; that there will be improvement in investment, employment and on consumption. In the last quarter of 2010, UK has employed labor force at 29.157 million based on a survey (HRM Guide, 2011) which resulted to a growth rate of 2.3% for earnings (HRM Guide, 2011) attributable to private sector. But UK’s unemployment rate as of March 2011 pegged at 8.0% and may increase steadily increase toward 2015. CIPD further report serious youth unemployment problem: there is an unemployed 1 person among 8 youths within the age bracket of 16-24 (HRM Guide, 2011). Further, UK officials reportedly spent ?43 billion on debt interest to reduce deficit to stabilize sustained economic growth (HM Treasury, 2010). In a separate development, international trading is seve rely affected with the natural disaster caused by quakes and tsunami affecting Japan which severely damaged properties and lives as well as caused major threat with the impending meltdown of its nuclear power plants. Elsewhere in major areas of the world, e.g.