Microeconomics Essay Example | Topics and Well Written Essays - 500 words - 9

Microeconomics - Essay Exampleby Geoff Colvin discusses the state of affairs of the US parsimony and how globalization is affecting it. This essay summarizes the findings of the article as well as providing a critical synopsis of the potential recession in the United Stats.One of the major computes that has spin a downturn for the US is the weakening of the housing market which caused consumers to diminish their overall spend. The house boom of the last decade was partly created to the ability of the American citizens to obtain very cheap financing which allowed the population to gain equity and take over confidence to continue to spend. The money was readily available for financing purposes because a large number of country internationally were saving a lot of money and plenty of dollars that came from international trade, while the American citizen was spending money madly. The typical American citizen six to eight years ago had a debt to equity ratio of one to one, now th is number has shifted to ratio of close to 1 to 0.72 to implying that the persona debt is much higher(prenominal) the equity. When peoples credit is capped out no more money can come in to delivery in the form of loans since the citizens do not qualify for additional credit.Another major factor in which the international community is affecting the US economy is in the job market. Many transnational firms are staying away from the United States as a potential investment location due the higher cost of labor in the United States. There are new emerging economies competing for the new jobs of the knowledge economy of our century that provide competitive advantages to the US labor costs. One of these economies is the India who has the second highest population in the world. India is using an economic model based on exporting services for the lucrative IT industry. The Chinese economy has become the dominant manufacturing based economy in the world which hopes that the United States do es not fall into a recession since