Essay Of Economic Crisis

The Global Economic Crisis Essay

In the late 2000s, the World suffered from a big global economic crisis which caused “the largest and sharpest drop in global economic activity of the modern era”, in which “most major developed economies find themselves in a deep recession”, according to McKibbin and Stoeckel (1). Because its consequences have a very big impact to the whole world, many economists and scientist have tried to find the causes of the crisis; and some major causes have been emphasized are greed, the defection of the free market system, and the lack of prudent regulation and supervision. This essay will focus on the global imbalances, one of the most important causes of the current economic crisis.
Many researchers have pointed out that the global imbalances are the root of the recent financial crisis. Portes claims that “the underlying problem in international finance over the past decade has been global imbalances, not greed, poor incentive structures, or weak financial regulation, however egregious and important these may be.” (2). According to him, the global imbalances lead to “the increasing in dispersion of current account”, which “puts a burden on financial systems to intermediate.”
In 1996, the US current account and emerging market plus developing country current account were each about zero. In 2008, US current account was in deficit by $ 600 bn, the emerging market/developing country current account in surplus by $ 900 bn. (sect. 1.1)
Moreover, the global imbalances also make capital flowing incorrectly, from developing countries to advanced countries, from advanced countries to other advanced countries. This makes developing countries with fast productivity growth show capital outflows and vice versa, leads to the surplus of developing countries, and increases the rate of deficit of developed countries. For example, China, a developing country, has been considered as one of the countries with biggest surplus for a long time, while the US, on the other hand, the developed country with highest rate of deficit. In general, the developing and developed countries together make a financial ecosystem that when a member problem, the whole system will be collapsed rapidly. McKibbin and Cagliarini gave a good example here:
Rising demands from China (and, to some extent, India), plus a booming world economy saw commodity prices rise across oil, minerals and food from late 2004 to late 2007. The shock to the global economy from this commodity price boom was as big as the first oil shock in the 1970s. (qtd. in McKibbin and Stoeckel 5).
As a consequence, the global imbalances contribute...

Loading: Checking Spelling


Read more

The Global Financial Crisis Essay

618 words - 2 pages The global economic crisis beginning mid-2007 was and still is an unsettling event in the history of the world economy. But politicians today, and in fact, many major corporations of the world have found that it was beneficial simply to ignore it. But in October 2011, the world saw one of the largest uproars ever seen in the face of the economic crisis. From New York to Rome, the public voiced dissatisfaction with government policy fueled by...

The Global Financial Crisis Essay

1000 words - 4 pages The global financial crisis has brought wide-ranging changes to consumer spending behaviour and consumption patterns throughout the world with the economic downturn impacting on the spending and purchasing power of people. The findings of a study conducted by Booz and Company in 2008 on consumer spending behaviour revealed that, firstly, the unprecedented confluence of the dramatic rise in oil prices, the substantial deterioration of housing...

The Global Financial Crisis

2812 words - 11 pages Financial crisis and resulting worldwide depression has at the present moved from containing the infection to precise actions designed at promote improvement and altering policy to stop to reoccurrence of the trouble. There are many financial experts says that the improving economic and financial position might reason rigid improvement of the monetary scheme to be unable to find some grip the crowded policy. “Financial market a place or channel...

The US & Global Economic Trades

964 words - 4 pages The US & Global Economic Trades Change is a constant. The ability to change at a rate greater than or equal to that constant helps separate successful companies and countries (Kotter, 2012). The US and South Korea serve as examples of countries that have underwent transformational changes the last 50 years. While the US continues to become more specialty oriented, South Korea has completely reinvented itself from the depths of economic...

The World Economic Crisis: A Marxist Analysis

3354 words - 13 pages A financial crisis developed with an amazing speed starting from the late summer and early autumn of 2008 and it still affects the world today. This crisis has damaged many of the largest financial institutions firstly in the US and the whole world then followed, but the worst damage was that a large part of the world's financial system had almost collapse. A lot of researches tried to explain the reasons of the current global crises and try to...

The Argentine Economic Crisis 1999-2002

3411 words - 14 pages The Argentine Economic Crisis 1999-2002 Basic Information About Argentina Argentina is a nation located on the East coast of the sothern-most tip of South America. It occupies an area of 2,766,890 square kilometers, which is approximately equal to about three-tenths the size of the United States. It has a population of nearly 40 million people with a growth rate of 1.13%. The populace is 97% Caucasian (primarily of Italian and...

The Global Financial Crisis and Its Impact

2217 words - 9 pages 1.0 The Global Financial Crisis and Its Impact The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub-prime mortgage crisis in the US in 2007. The sub-prime mortgages were given to high-risk lenders (with bad credit history) who were in danger of defaulting, which eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In...

What caused the Global Financial Crisis (GFC)?

2212 words - 9 pages What caused the Global Financial Crisis (GFC)? This was the first global financial crisis since the Great Depression of the 1930s; it spread at an un-parallel rate across the world (Claessens et al, 2013). In the aftermath of the Great Depression it was universally believed by economists that the unregulated financial markets were to blame as they were fundamentally unstable, subject to manipulation by bankers, and capable of triggering deep...

Geoengineering and The Global Climate Crisis

1943 words - 8 pages Does one ever think of the potential catastrophic harm they’re causing by turning on the lights or by using their cars? Don’t we want a world where our grandchildren and great grandchildren can live safety and comfortably? At the rate were going this will not be possible; we’ve added more than 1.4 trillion tones of Carbon Dioxide (CO2) in just two hundred years, and its messing up our planet (Siegel 1). The use of fossil fuels has...

The Ecological Consequences of Global Economic Growth

2079 words - 8 pages The Ecological Consequences of Global Economic Growth “There have been five ‘ mass extinctions’ in the history of the earth, when between 65% and 95% of all species were wiped out, due to natural processes of selection and evolution. Some scientists now argue that we are heading for a ‘sixth extinction’, caused by the actions of humans.” (Cock and Hopwood, 1996:17) In the following I’m going to look at the positive and...

The Potential of Africa's Global Economic Integration

2458 words - 10 pages Africa has long been thought of as a place where trade could not happen, especially on an international level. In recent times however, there has been a push to create more integration among African nations. These nations have realized the benefits which occur when firms are freely able to engage in investment from country to country moving away from the old protectionist policies of earlier years. As the textbook Global Business explains, these...

Financial crisis

Financial crisis is a topic which interests greater number of students every year. This topic is relevant for the present days. That’s why students choose to write an essay about financial crisis at universities or colleges. The benefit of writing a basic essay about financial crisis is that the writer is actually living in times of its happening. That gives him a chance to present subjective opinion of the current situation from financial and economic point of view of certain countries.

Writing an Essay about Financial Crisis

  • Essay Outline. Essay about financial crisis should outline the main reasons of the crisis in the country, its negative effects on the economic growth and society well-being. The next step is to present potential ways how to predict and prevent possible crises in the future according to essay basics structure.
  • Past two decades were famous for a number of financial crises in all the economy of many countries worldwide. As a rule, every crisis is followed by economic recessions, and sometimes effect it makes is absolutely devastating.

  • The crucial nature of crisis in financial sphere is a topic that interests many researches. Economists try to analyze the reasons and mechanism of the crisis, predict possible ways of its development and evaluate the damage it will cause.

  • One of the research aspects is comparing crises in different countries and trying to create a plan for avoiding their negative afterwards effects.

Focusing on Financial Crises Details

There are different mechanisms of the financial crisis development. Every country has some peculiarities, but there is a specific pattern for describing common periods of financial crises.

  • Collapse in asset prices, plunge in capital flight and bank-credit.

  • Boom in asset prices, investment, bank lending and capital inflows.


Causes of a Financial Crisis

  1. Banks lend people more money than they can afford to take. The reason why this happens is that there is very low possibility that all depositors will ask their money back at the same time. If this happens, the banks will definitely fail.

  2. An employment of “fractional reserve” policy by banks takes place.

  3. Fiat money and fractional reserve banking allows banks to access “free” money. At the same time it makes government to appear to be “generous” by giving over-promising of social welfare.

  4. Financial crises have the roots in the easy credit expansion. It creates the financial “boom and bust” cycles.

Solutions for a Financial Crisis

  • Reinstitute the money that are backed by real commodities. Ideally, all currency should be backed by gold, as gold is the only money that evolved
    over time. It is important to understand that gold and silver is money for market when fiat money are for government.

  • Abolish fiat money.

  • Start abolishing all central banks.

  • Let private banks issue 100% of money backed by gold.

  • Take the issuance of money away from the hands of government. Different kinds of manipulations will be made as long as they have a control of

  • Make gold a global currency. It will prevent the government manipulations.

  • Have free-banking, 100% gold backed monetary system. This solution will attack the problem at the root and save the national finance from further

These are possible ways of solving the problem of financial crisis if at least one action from this list can be successfully done, all the countries will feel remarkable improvement.

Writing Tips

There are several important aspects you should understand writing essay about financial crisis in accordance with essay basics.

  1. Review how the current financial crisis has catalyzed an array of responses.

  2. Search for financial crisis’s causes.

  3. Clear understanding of financial crisis cause will help to provide suggestions for finding a “remedy”.

  4. Array responses should also include reworking regulations and scapegoating.

  5. Review the possibility of massive capital injections.

  6. Narrow down the topic and review one industry that financial crisis has influenced the most. (For example, how the financial crisis has affected
    the automobile industry?)

How Can We Help?

We have the team of professional writers who will be able to write an essay for you in extremely little time-frame. The essay basic writing can be written from ten days to six hours. Also, we provide editing services for very affordable prices. You can proofread your essay and the writer will proofread, do suggestions and add the most necessary information to your essay.

More and more students want to explore the topic of financial crisis in their essays since it depicts the modern days. It is the most common reason why students submit their writing tasks at colleges and universities on such a topic. One of the benefits of exploring financial crisis in the essay is that a writer is well aware of all details since he/she lives in the times when it occurs. In such a way, the writer can present a personal perception of the crisis and its causes as well as offer possible economic solutions when referring to a country he/she lives in.

Creating an Essay about a Financial Crisis

  • Write an outline of the essay. Usually, an essay about financial crisis should present the key causes of the crisis that takes place in a certain country, its negative influence on the economy sector and people in general. Moreover, writer has to present possible ways to predict the outbreak of the crisis and evaluate the future outcomes.

  • The last century is known for numerous financial crises that negatively influenced the economy of many countries on a global scale. In general, every crisis provokes the recession in economy, which leads to detrimental and drastic changes in the life of the country.

  • The essence of the crisis is the topic that many economists and financial experts discuss. They try to evaluate the causes and development of the crisis, predict future results and damages.

  • More and more researchers in numerous countries work in the field of crisis prevention and introduce plans for eliminating devastating effects of the crisis.

Details of Financial Crises

There are numerous aspects that contribute to the development of the financial crisis. Undoubtedly, they are different for every country, but still there are common patterns as well.

  • Increase in the capital inflows, bank lending, investment, and asset prices.

  • Deterioration in the capital flight, bank-credit, and collapse in asset prices.

Reasons of a Financial Crisis

  1. People borrow more money from banks than they can afford. The bank is bound to failure if all depositors ask their money back simultaneously, which happens very rarely, but still is seen in the modern days.

  2. Fractional reserve
    policy is introduced in the employment sphere.

  3. Fractional reserve banking does not prohibit to access free money. Thus, the government seems to be too generous since it funds numerous programs and promises to improve the life of ordinary people.

  4. The most common reason of financial crises is the easy credit expansion, which provokes the outbreak and boom cycles.

Possible Solutions to the Financial Crises

  • Back-up the money with real commodities. All monetary savings should be backed by silver or gold since precious metal will always be invaluable. There is a need to realize that silver and gold are money that are of high interest for the market, whereas fiat money – for the government.

  • Eradicate fiat money.

  • Begin eradication all central banks and their institutions.

  • Establish a rule for private banks – money should be 100% backed up by gold.

  • Do not allow government to interfere in the banking process. Usually, governments make the unfavorable manipulations with issuance money.

  • Establish gold as a global currency in order to predict possible government moves and manipulations.

  • Introduce free-banking system supported with gold. Such a step will predict possible crises and eradicate the essence of the issue.

The steps presented above are possible ways to cope with the global crisis and improve the economic situation in certain countries.

Hints for Writing an Essay

There are certain rules students have to realize when they are given a task to write about a financial crisis.

  1. Read the responses of ordinary people and scientists on the matter of crisis.

  2. Find information about the causes of financial crisis.

  3. Understanding of the crisis roots is very beneficial while presenting possible solutions to the issue.

  4. Check whether there is a need of massive capital injections.

  5. Check responses about government interference in the banking processes.

  6. Do not forget to narrow down your topic to a specific field or industry that was affected by the crisis. For instance, how the financial crisis influenced the food manufacturing?

Our Custom Essay Writing Assistance

Our online writing company has a team of talented and skillful writers who can create any essay for you at a cheap price. You can indicate any deadline – from 4 hours till several weeks. Moreover, our prices are affordable for every student. Even if you have already wrote an essay on your own, you can ask our editors to proofread it and offer recommendations on what to improve. Buy an essay right now and we promise not to let you down!

Share this article on:

Share on FacebookShare on TwitterShare on Pinterest




Affiliate ProgramEarn 10% from all orders made by people you bringYour people also get 17% discount for their first order


Leave a Reply

Your email address will not be published. Required fields are marked *