Global Economy Development and Financial Market Trends
Keywords:Global economy, public debts, market imbalances, financial risks, monetary policy.
AbstractPurpose of the article: Over the past couplne of months, the global economy went trhough a cascade of financial shocks that threw many economies. The economic damage has been extensive, with few countries spared – even those far from the source of the turmoil. As prospects for both global growth and inflation moderated over the period, bond yields declined in major developed countries. Prices of many commodities reached a plateau or even fell, lowering the near-term inflation outlook. Investors continued to expect strong growth in emerging economies, but cut back their growth expectations for the United States d Europe. The growth outlook for other major advanced economies remained subdued. The purpose of this artice is to analyse the global economy development in both emerging and advanced economies, as well as financial market trends and their predictions in the light of international financial imbalances. Addressing overindebtedness, private as well as public, is the key to building a solid foundation for high, balanced real growth and a stable financial system. Methodology/methods: The methods of analyses and synthesis have been used to enable to judge the complexity of objects from more angles and to formulize the conclusions of the analytical part. Empirical methods had enabled us to gain an overview about turnaround financial management applied during volatile times in the selected economies and financial and non-financial institutions. Scientific aim: The main scientific aim is to conduct the analyses of the theoretical assumptions leading up to changing trends in the development of the global economy, as well as analyses of factors, economical indicators, financial risks and their predictions, in connection with the financial markets and selected economies development based on own elaborated knowledge’s from research field. Findings: In many economies, high debt levels still burden households as well as financial and non-financial institutions, and the consolidation of fiscal accounts has barely started. International financial imbalances are re-emerging. Highly accommodative monetary policies are fast becoming a threat to price stability. Financial reforms have yet to be completed and fully implemented. And the data frameworks that should serve as an early warning system for financial stress remain underdeveloped. Conclusions: Interrelated imbalances made pre-crisis growth in several advanced countries unsustainable. Rapidly increasing debt and asset prices resulted in bloated housing and financial sectors. The boom also masked serious longterm fiscal vulnerabilities that, if left unchecked, could trigger the next crisis.The lessons of the crisis apply to emerging market economies, too. And those where debt is fuelling huge gains in property prices and consumption are running the risk of building up the imbalances that now plague the advanced economies.
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