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How does the global economy work?

The global economy has changed significantly over the past few decades, in the way that it is organised and governed by collaborating nations. These changes have repercussions that not only affect the flow of goods and services between countries, but also the movement of people. As we’ve seen on occasions over the last century, too great a fluctuation in this international economic system can lead to a global economic crisis.

So what exactly is the global economy, how does it function, and how does it affect our lives? Here we take a closer look to help you understand the complexities of the force that governs the modern world!

What is a global economy?

The global economy refers to the interconnected worldwide economic activities that take place between multiple countries. These economic activities can have either a positive or negative impact on the countries involved.

The global economy comprises several characteristics, such as:

Globalisation: Globalisation describes a process by which national and regional economies, societies, and cultures have become integrated through the global network of trade, communication, immigration, and transportation. These developments led to the advent of the global economy. Due to the global economy and globalisation, domestic economies have become cohesive, leading to an improvement in their performances.
International trade: International trade is considered to be an impact of globalisation . It refers to the exchange of goods and services between different countries, and it has also helped countries to specialise in products which they have a comparative advantage in. This is an economic theory that refers to an economy's ability to produce goods and services at a lower opportunity cost than its trade partners.
International finance: Money can be transferred at a faster rate between countries compared to goods, services, and people; making international finance one of the primary features of a global economy. International finance consists of topics like currency exchange rates and monetary policy.
Global investment: This refers to an investment strategy that is not constrained by geographical boundaries. Global investment mainly takes place via foreign direct investment (FDI).

Why is the global economy important?

We can understand the importance of the global economy by looking at it in relation to emerging markets:

Economic importance at a micro and macro level: The increase in the world’s population has led to emerging markets growing economically, making them one of the primary engines of world economic growth. The growth and resilience shown by emerging markets is a good sign for the world economy . Before delving into the next point, you need to understand the concept of microeconomics. It refers to the study of the behaviour of households, individuals, and firms with respect to the allocation of resources and decision-making. In simpler terms, this branch of economics studies how people make decisions, what factors affect their decisions, and how these decisions affect the price, demand, and supply of goods in the market. Therefore, from the perspective of microeconomics, some of the largest firms with high market value and a few of the richest individuals in the world hail from these emerging markets, which has helped in the higher distribution of income in these countries. However, many of these emerging countries are still plagued by poverty, and work still needs to be done to work towards eradicating it.
Long-term world economic outlook: According to financial and economic projections based on demographic trends and capital productivity models, the GDP in emerging market economies in 2019 are likely to keep increasing at a positive rate. According to an emerging markets economic forecast for 2019 conducted by Focus Economics , the economy is set to increase by 7.5% in India, 6.6% in Philippines, 6.3% in China, 5.3% in Indonesia, 5.1% in Egypt, 4.9% in Malaysia, 3.8% in Peru and 3.7% in Morocco.

Who controls the global economy?

Many people think that the global economy is controlled by governments of the largest economies in the world , but this a common misconception. Although governments do hold power over countries’ economies, it is the big banks and large corporations that control and essentially fund these governments. This means that the global economy is dominated by large financial institutions. According to world economic news , US banks participate in many traditional government businesses like power production, oil refining and distribution, and also the operating of public assets such as airports and train stations. This was proven when certain members of the US Congress sent a letter to the Federal Reserve Chairman Ben Bernanke. Here’s an excerpt from the letter:

“Here are a few examples. Morgan Stanley imported 4 million barrels of oil and petroleum products into the United States in June, 2012. Goldman Sachs stores aluminium in vast warehouses in Detroit as well as serving as a commodities derivatives dealer. This “bank” is also expanding into the ownership and operation of airports, toll roads, and ports. JP Morgan markets electricity in California.

In other words, Goldman Sachs, JP Morgan and Morgan Stanley are no longer just banks – they have effectively become oil companies, port and airport operators, commodities dealers, and electric utilities as well.”

The functioning of the global economy can be explained through one word —transactions. International transactions taking place between top economies in the world help in the continuance of the global economy. These transactions mainly comprise trade taking place between different countries. International trade includes the exchange of a variety of products between countries. It ranges all the way from fruits and foods, to natural oil and weapons. Such transactions have a number of benefits including:

Providing a foundation for worldwide economic growth, with the international economy set to grow by 4% in 2019 (source: World Trade Organisation );
Encouraging competitiveness between countries in various markets;
Raising productivity and efficiency across countries;
Helping in the development of underdeveloped countries by allowing them to import capital goods (machinery and industrial raw materials) and export primary goods (natural resources and raw materials).

What are the effects of global economy?

Nearly every country in the world is in some way affected by things that happen in what may seem at times, like unrelated countries - due to the influence of the global economy. A good example of this is the economic impact that the Brexit vote will have other countries, not only in Europe, but across the globe. Brexit was referendum decision for the United Kingdom to withdraw from the European Union (EU).

The main cause of these effects is economics — based on the production and exchange of goods and services. Restrictions on the import and export of goods and services can potentially hamper the economic stability of countries who choose to impose too many.

The purpose of international trade is similar to that of trading within a country. However, international trade differs from domestic trade in two aspects:

The currencies of at least two countries are involved in international trade, so they must be exchanged before goods and services can be exported or imported;
Occasionally, countries enforce barriers on the international trade of certain goods or services which can disrupt the relations between two countries.

Countries usually specialise in those products that they can produce efficiently, which helps in reducing overall manufacturing costs. Then, countries trade these products with other countries, whose product specialisation is something else altogether. Having greater specialisation helps countries take advantage of economies of scale. Economies of scale refer to the proportionate saving in costs gained by an increased level of production. Manufacturers in these countries can focus all their efforts on building factories for specialised production, instead of spending additional money on the production of various types of goods.

Occasionally countries add barriers to international trade. Some of these barriers include trade tariffs (taxes on imports) and trade quotas (limitation on the number of products that can be imported into a country). Trade barriers often affect the economies of the trading countries, and in the long run, it becomes difficult to keep employing such barriers.

What are the benefits of global economy?

There are numerous benefits of a global economy, which include:

Free trade : Free trade is an excellent method for countries to exchange goods and services. It also allows countries to specialise in the production of those goods in which they have a comparative advantage.
Movement of labour: Increased migration of the labour force is advantageous for the recipient country as well as for the workers. If a country is going through a phase of high unemployment, workers can look for jobs in other countries. This also helps in reducing geographical inequality.
Increased economies of scale : The specialisation of goods production in most countries has led to advantageous economic factors such as lower average costs and lower prices for customers.
Increased investment: Due to the presence of global economy, it has become easier for countries to attract short-term and long-term investment. Investments in developing countries go a long way in improving their economies.

Factors affecting global economy

According to the latest economic news, here are some of the key factors that influence and affect how well the global economy works:

Natural resources;
Infrastructure;
Population;
Human capital;
Technology;

If you are interested in learning more about the global economy and how it works, Edology offers a Certificate Course for Policy Issues in the Global Economy. Find out more here .

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Chapter 1. The economic impacts of the COVID-19 crisis

The COVID-19 pandemic sent shock waves through the world economy and triggered the largest global economic crisis in more than a century. The crisis led to a dramatic increase in inequality within and across countries. Preliminary evidence suggests that the recovery from the crisis will be as uneven as its initial economic impacts, with emerging economies and economically disadvantaged groups needing much more time to recover pandemic-induced losses of income and livelihoods . 1

In contrast to many earlier crises, the onset of the pandemic was met with a large, decisive economic policy response that was generally successful in mitigating its worst human costs in the short run. However, the emergency response also created new risks—such as dramatically increased levels of private and public debt in the world economy—that may threaten an equitable recovery from the crisis if they are not addressed decisively.

Worsening inequality within and across countries

The economic impacts of the pandemic were especially severe in emerging economies where income losses caused by the pandemic revealed and worsened some preexisting economic fragilities. As the pandemic unfolded in 2020, it became clear that many households and firms were ill-prepared to withstand an income shock of that scale and duration. Studies based on precrisis data suggest, for example, that more than 50 percent of households in emerging and advanced economies were not able to sustain basic consumption for more than three months in the event of income losses . 2 Similarly, the average business could cover fewer than 55 days of expenses with cash reserves . 3 Many households and firms in emerging economies were already burdened with unsustainable debt levels prior to the crisis and struggled to service this debt once the pandemic and associated public health measures led to a sharp decline in income and business revenue.

The crisis had a dramatic impact on global poverty and inequality. Global poverty increased for the first time in a generation, and disproportionate income losses among disadvantaged populations led to a dramatic rise in inequality within and across countries. According to survey data, in 2020 temporary unemployment was higher in 70 percent of all countries for workers who had completed only a primary education. 4 Income losses were also larger among youth, women, the self-employed, and casual workers with lower levels of formal education . 5 Women, in particular, were affected by income and employment losses because they were likelier to be employed in sectors more affected by lockdown and social distancing measures . 6

Similar patterns emerge among businesses. Smaller firms, informal businesses, and enterprises with limited access to formal credit were hit more severely by income losses stemming from the pandemic. Larger firms entered the crisis with the ability to cover expenses for up to 65 days, compared with 59 days for medium-size firms and 53 and 50 days for small and microenterprises, respectively. Moreover, micro-, small, and medium enterprises are overrepresented in the sectors most severely affected by the crisis, such as accommodation and food services, retail, and personal services.

The short-term government responses to the crisis

The short-term government responses to the pandemic were extraordinarily swift and encompassing. Governments embraced many policy tools that were either entirely unprecedented or had never been used on this scale in emerging economies. Examples are large direct income support measures, debt moratoria, and asset purchase programs by central banks. These programs varied widely in size and scope (figure 1.1), in part because many low-income countries were struggling to mobilize resources given limited access to credit markets and high precrisis levels of government debt. As a result, the size of the fiscal response to the crisis as a share of the gross domestic product (GDP) was almost uniformly large in high-income countries and uniformly small or nonexistent in low-income countries. In middle-income countries, the fiscal response varied substantially, reflecting marked differences in the ability and willingness of governments to spend on support programs.

Figure 1.1 Fiscal response to the COVID-19 crisis, selected countries, by income group

Similarly, the combination of policies chosen to confront the short-term impacts differed significantly across countries, depending on the availability of resources and the specific nature of risks the countries faced (figure 1.2). In addition to direct income support programs, governments and central banks made unprecedented use of policies intended to provide temporary debt relief, including debt moratoria for households and businesses. Although these programs mitigated the short-term liquidity problems faced by households and businesses, they also had the unintended consequence of obscuring the true financial condition of borrowers, thereby creating a new problem: lack of transparency about the true extent of credit risk in the economy.

Figure 1.2 Fiscal, monetary, and financial sector policy responses to the COVID-19 crisis, by country income group

The large crisis response, while necessary and effective in mitigating the worst impacts of the crisis, led to a global increase in government debt that gave rise to renewed concerns about debt sustainability and added to the widening disparity between emerging and advanced economies. In 2020, 51 countries—including 44 emerging economies—experienced a downgrade in their government debt risk rating (that is, the assessment of a country’s creditworthiness) . 7

Emerging threats to an equitable recovery

Although households and businesses have been most directly affected by income losses stemming from the pandemic, the resulting financial risks have repercussions for the wider economy through mutually reinforcing channels that connect the financial health of households, firms, financial institutions, and governments (figure 1.3). Because of this interconnection, elevated financial risk in one sector can spill over and destabilize the economy as a whole. For example, if households and firms are under financial stress, the financial sector faces a higher risk of loan defaults and is less able to provide credit. Similarly, if the financial position of the public sector deteriorates (for example, as a result of higher government debt and lower tax revenue), the ability of the public sector to support the rest of the economy is weakened.

Figure 1.3 Conceptual framework: Interconnected balance sheet risks

This relationship is, however, not predetermined. Well-designed fiscal, monetary, and financial sector policies can counteract and reduce these intertwined risks and can help transform the links between sectors of the economy from a vicious doom loop into a virtuous cycle.

One example of policies that can make a critical difference are those targeting the links between the financial health of households, businesses, and the financial sector. In response to the first lockdowns and mobility restrictions, for example, many governments supported households and businesses using cash transfers and financial policy tools such as debt moratoria. These programs provided much-needed support to households and small businesses and helped avert a wave of insolvencies that could have threatened the stability of the financial sector.

Similarly, governments, central banks, and regulators used various policy tools to assist financial institutions and prevent risks from spilling over from the financial sector to other parts of the economy. Central banks lowered interest rates and eased liquidity conditions, making it easier for commercial banks and nonbank financial institutions such as microfinance lenders to refinance themselves, thereby allowing them to continue to supply credit to households and businesses.

The crisis response will also need to include policies that address the risks arising from high levels of government debt to ensure that governments preserve their ability to effectively support the recovery. This is an important policy priority because high levels of government debt reduce the government’s ability to invest in social safety nets that can counteract the impact of the crisis on poverty and inequality and provide support to households and firms in the event of setbacks during the recovery.

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5 things you should know about the state of the global economy

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Is this the year we overcome the global economic crisis caused by the pandemic? Are our jobs in danger? Who has lost the most in the crisis and what can be done to recover? As the UN Department of Social and Economic Affairs (DESA) prepares to launch the mid-year update of the 2021 World Economic Situation and Prospects (WESP) report, here are five things you need to know about the state of the global economy.

Dock workers unload fresh fish from a boat in Casablanca, Morocco.

1) US and China bounce back, but a slow recovery for developing countries

While economic output in the United States and China is expected to grow robustly and lift global growth, many developing economies are not expected to return to pre-pandemic output levels anytime soon. The pandemic is far from over for most developing countries where vaccination is advancing slowly, and fiscal pressures have intensified.

2) The situation of the most vulnerable has become even more precarious

Lockdowns and social distancing measures resulted in large job losses in contact-intensive and labour-intensive service sectors, which predominantly employ women. The pandemic has also exposed the vulnerability of informal employment, which is the main source of jobs in many countries and which offers less job security, social protection and access to healthcare.

An egg vendor sits in her stall in Quiapo, Philippines.

3) Global trade recovery is strong, particularly in Asia

Merchandise trade has already surpassed pre-pandemic levels, buoyed by strong demand for electrical and electronic equipment, personal protective equipment (PPE) and other manufactured goods. Trade in services remains constrained by restrictions on international travel. While exports from Asian economies have soared, exports from Africa, Western Asia, and the Commonwealth of Independent States has stalled.

4) The COVID-19 crisis has inflicted more harm on women and girls

This crisis disproportionately affected women, who suffered significant job and income losses, contributing to the worsening of gender poverty gaps. Burdened by increased home care duties, many girls and women gave up on schools, and the workforce altogether. Returning to school and work might take longer or may not happen at all for many of them, further widening gender gaps in education, income and wealth.

Women textile workers perform quality control tests at a factoy in Izmir, Turkey.

5) Countries need to do more to address the uneven impact of the COVID-19 crisis

There is an urgent need for countries to formulate better targeted and gender-sensitive policies to drive a more resilient and inclusive recovery from the crisis. Though on the frontlines of the pandemic, women have been under-represented in pandemic related decision-making and economic policy responses. The severe and disproportionate impact of the pandemic on women and girls call for more targeted policy and support measures for women and girls, not only to accelerate the recovery but also to ensure that the recovery is inclusive and resilient.

A rice mill worker fills a sack with rice in Ratchathani province, Thailand.

A version of this article first appeared in the May edition of the Department of Economic and Social Affairs newsletter, UN DESA Voice .

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Essay on Global Economy – Short Essay, 10 Lines, 500 & 1000 Words

Essay on Global Economy in English: This essay delves into the complexities of the global economy, exploring key factors that shape its dynamics, the impact of globalization, challenges and opportunities for nations, and the role of international cooperation.

Essay on Global Economy analyzes the interconnectedness of financial markets, trade, and technological advancements, discussing how these factors influence economic growth, inequality, and sustainability on a global scale.

The Essay on Global Economy also examines the implications of economic policies, geopolitical considerations, and the importance of collaborative efforts to address shared challenges in today’s increasingly interconnected world.

Short Essay on Global Economy in English - 100 Words

Table of Contents

Essay on Global Economy in 10 Lines

This essay explores the intricacies of the global economy , delving into factors shaping its dynamics, the impact of globalization, challenges and opportunities for nations, and the role of international cooperation in addressing shared economic challenges.

The global economy is a complex web of interconnected financial systems, trade, and technological advancements.
Globalization has intensified economic integration, linking nations and influencing their economic fortunes.
Economic policies, trade agreements, and technological innovations significantly impact the global economic landscape.
Financial markets play a crucial role, affecting economies worldwide and highlighting the interconnected nature of the global economy.
The global economy poses both challenges, such as economic inequality, and opportunities for nations to collaborate for mutual benefit.
Geopolitical considerations and international relations impact economic dynamics on a global scale.
Technological advancements, especially in communication and transportation, have accelerated global economic interactions.
Sustainable development and environmental considerations are increasingly integral to discussions about the global economy.
Economic crises, like the 2008 financial downturn, emphasize the need for global cooperation in stabilizing and strengthening the world economy.
Collaborative efforts and effective international governance are essential for addressing shared economic challenges and fostering a resilient global economy.

Also See – Essay on Environmental Conservation – Short Essay, 10 Lines, 500 & 1000 Words

Short Essay on Global Economy in English

This short essay provides a concise overview of the global economy, examining its interconnected nature, the impact of globalization, and the challenges and opportunities it presents for nations in today’s interconnected world.

Navigating the Global Economy

The global economy, intricately woven with threads of trade, finance, and technology, represents a dynamic tapestry that binds nations in an interconnected web. Globalization, the driving force behind this interdependence, brings both opportunities and challenges.

Economic policies, trade agreements, and technological advances shape this landscape, influencing the fortunes of nations. Financial markets, sensitive to global events, underscore the shared destiny of economies. In this era of rapid change, collaboration is key.

As nations grapple with economic inequality and sustainability, collective efforts become imperative. The global economy, a reflection of shared destinies, demands thoughtful navigation for a harmonious and prosperous future.

Essay on Global Economy in 500 Words

This Essay on Global Economy delves into the intricacies of the global economy, exploring the impact of globalization, economic policies, and international collaboration on interconnected nations, analyzing challenges, opportunities, and the imperative for sustainable and inclusive growth.

Navigating the Global Economy: Challenges and Opportunities

The global economy stands as a testament to the interconnectedness of nations, where the threads of commerce, finance, and technology weave a complex tapestry. In this era of globalization, the once-distant economies of the world are now intricately linked, influencing and shaping each other in unprecedented ways.

Economic policies play a pivotal role in determining the trajectory of individual nations within this global framework. Governments craft strategies to spur growth, manage inflation, and foster employment, with an eye on their position in the larger global economic theater. Trade agreements, a cornerstone of global economic relations, facilitate the movement of goods and services across borders, fostering mutually beneficial exchanges while also posing challenges related to competition and disparities.

The swift evolution of technology has emerged as a transformative force in the global economy. Innovations in communication and transportation have virtually erased geographical boundaries, enabling real-time transactions and information flow. Technology has become the great equalizer, offering opportunities for emerging economies to leapfrog traditional developmental stages and participate actively in the global marketplace. However, this rapid technological advancement also raises concerns about job displacement, cybersecurity, and the ethical use of data on a global scale.

Financial markets, often considered the pulse of the global economy, respond acutely to geopolitical events and economic policies. The interconnected nature of these markets means that a ripple in one part of the world can create waves across continents. The 2008 financial crisis remains a stark reminder of the fragility of the global financial system and the need for vigilant oversight and collaboration to prevent and mitigate such crises.

While the global economy presents immense opportunities for growth and prosperity, it also poses significant challenges. Economic inequality, both within and among nations, has become a pressing concern. The benefits of globalization have not been uniformly distributed, leading to disparities that can fuel social unrest and hinder sustainable development. Striking a balance between economic growth and inclusive policies is paramount for fostering a stable and equitable global economy.

Moreover, the issue of sustainability has moved to the forefront of global economic discussions. As the environmental impact of economic activities becomes more apparent, there is a growing recognition that economic growth must be coupled with responsible environmental stewardship. Nations are increasingly focusing on green technologies, renewable energy, and sustainable practices to ensure a harmonious coexistence between economic development and ecological preservation.

In this interconnected world, geopolitical considerations and international relations play a crucial role in shaping the global economic landscape. Trade tensions, political conflicts, and diplomatic relations can have far-reaching implications for economies worldwide. Collaborative efforts and diplomatic initiatives are essential for maintaining stability and fostering a climate conducive to economic growth.

In conclusion, navigating the global economy requires a delicate balance between harnessing opportunities and addressing challenges. The interconnectedness of nations in this era of globalization demands thoughtful economic policies, sustainable practices, and international collaboration. As we stand at the intersection of technology, trade, and geopolitics, the choices we make today will reverberate globally, shaping the trajectory of economies and the well-being of societies across the world.

Essay on Global Economy in English in 1000 Words

This comprehensive essay explores the intricacies of the global economy, examining the impact of globalization, economic policies, technology, and international collaboration on interconnected nations, analyzing challenges, opportunities, and the imperative for sustainable and inclusive growth in a world shaped by economic interdependence.

Introduction

The global economy, an intricate web of interconnected nations, stands as a testament to the forces of globalization, economic policies, technological advancements, and the imperative for international collaboration. This essay explores the multifaceted dimensions of the global economy, unraveling its complexities and examining the critical factors that shape its dynamics.

Economic Policies in a Global Context

Economic policies serve as the foundation for a nation’s economic journey within the global arena. This section delves into how governments craft strategies to foster growth, manage inflation, and promote employment. The impact of these policies on a nation’s position in the global economic landscape is analyzed, highlighting the delicate balance required to navigate the intricacies of international economic relations.

Trade Agreements and Global Economic Relations

Trade agreements form the backbone of global economic interactions, facilitating the movement of goods and services across borders. This section explores the significance of trade agreements in fostering mutually beneficial exchanges while also examining the challenges they pose, including issues of competition, disparities, and the evolving landscape of international trade relations.

Technology and the Global Economy

The swift evolution of technology has reshaped the global economy, erasing geographical boundaries and fostering unprecedented connectivity. This section examines how technological advancements in communication and transportation have transformed the way nations engage in economic activities. The opportunities and challenges posed by the relentless pace of technological innovation are explored, with a focus on the role of technology as a catalyst for both economic growth and disruption.

Financial Markets as the Pulse of the Global Economy

Financial markets are often considered the pulse of the global economy, responding acutely to geopolitical events and economic policies. This section analyzes the interconnected nature of financial markets and their role in shaping economic outcomes worldwide. The lessons learned from past financial crises, particularly the 2008 downturn, underscore the importance of vigilant oversight and collaborative efforts to ensure the stability of the global financial system.

Challenges and Opportunities in the Global Economy

The global economy presents both opportunities for growth and challenges that demand strategic navigation. Economic inequality, a pressing concern, is explored within and among nations, shedding light on the disparities that can hinder sustainable development and social cohesion. Sustainability emerges as a critical consideration, with a focus on responsible environmental stewardship and the integration of green technologies into global economic practices.

Geopolitical Considerations and International Relations

In this interconnected world, geopolitical considerations and international relations play a crucial role in shaping the global economic landscape. This section delves into how trade tensions, political conflicts, and diplomatic relations can have far-reaching implications for economies worldwide. The importance of collaborative efforts and diplomatic initiatives is highlighted as essential for maintaining stability and fostering a climate conducive to economic growth.

In conclusion, navigating the global economy requires a holistic understanding of its multifaceted dimensions. From crafting sound economic policies to leveraging technological advancements and fostering international collaboration, nations must strategically navigate the challenges and opportunities presented by the global economic landscape. As we stand at the crossroads of economic interdependence, geopolitical complexities, and technological innovation, the choices made today will shape the trajectory of economies and the well-being of societies across the world.

the intricate dynamics of the global economy necessitate a nuanced understanding of its various components and their interdependencies. This Essay on Global Economy has provided a comprehensive overview, highlighting the challenges and opportunities inherent in the contemporary economic landscape.

By examining factors such as trade, technology, and financial systems, it becomes evident that a collaborative and adaptive approach is essential for navigating the complexities of the global economy. As we forge ahead, fostering international cooperation and embracing innovative solutions will be paramount for sustained growth and prosperity on a global scale.

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In the U.S. and around the world, inflation is high and getting higher

Produce prices are displayed at a grocery store on June 10, 2022, in New York City.

Two years ago, with millions of people out of work and central bankers and politicians striving to lift the U.S. economy out of a pandemic-induced recession , inflation seemed like an afterthought. A year later, with unemployment falling and the inflation rate rising, many of those same policymakers insisted that the price hikes were “transitory” – a consequence of snarled supply chains, labor shortages and other issues that would right themselves sooner rather than later.

Now, with the inflation rate higher than it’s been since the early 1980s, Biden administration officials acknowledge that they missed their call . According to the latest report from the Bureau of Labor Statistics, the annual inflation rate in May was 8.6%, its highest level since 1981, as measured by the consumer price index . Other inflation metrics also have shown significant increases over the past year or so, though not quite to the same extent as the CPI.

With inflation in the United States running at its highest levels in some four decades, Pew Research Center decided to compare the U.S. experience with those of other countries, especially its peers in the developed world. An earlier version of this post was published in November 2021.

The Center relied primarily on data from the Organization for Economic Cooperation and Development (OECD), most of whose 38 member states are highly developed democracies. The OECD collects a wide range of data about its members, facilitating cross-national comparisons. We chose to use quarterly inflation measures, both because they’re less volatile than monthly figures and because they were available for all but one OECD country (Costa Rica, which joined the OECD in May 2021). Quarterly inflation data also were available for seven non-OECD countries with sizable national economies, so we included them in the analysis as well.

For each country, we calculated year-over-year inflation rates going back to the first quarter of 2010 and ending in the first quarter of this year. We also calculated how much those rates had risen or fallen since the start of the COVID-19 pandemic in the first quarter of 2020.

To get a sense of longer-term inflation trends in the U.S., we analyzed two measures besides the commonly cited consumer price index: The Consumer Price Index Retroactive Series (R-CPI-U-RS) from the Bureau of Labor Statistics, and the Personal Consumption Expenditures Price Index from the Bureau of Economic Analysis.

Inflation in the United States was relatively low for so long that, for entire generations of Americans, rapid price hikes may have seemed like a relic of the distant past. Between the start of 1991 and the end of 2019, year-over-year inflation averaged about 2.3% a month, and exceeded 5.0% only four times. Today, Americans rate inflation as the nation’s top problem , and President Joe Biden has said addressing the problem is his top domestic priority .

But the U.S. is hardly the only place where people are experiencing inflationary whiplash. A Pew Research Center analysis of data from 44 advanced economies finds that, in nearly all of them, consumer prices have risen substantially since pre-pandemic times.

A map showing where inflation is highest and lowest across 44 countries

In 37 of these 44 nations, the average annual inflation rate in the first quarter of this year was at least twice what it was in the first quarter of 2020, as COVID-19 was beginning its deadly spread. In 16 countries, first-quarter inflation was more than four times the level of two years prior. (For this analysis, we used data from the Organization for Economic Cooperation and Development, a group of mostly highly developed, democratic countries. The data covers 37 of the 38 OECD member nations, plus seven other economically significant countries.)

Among the countries studied, Turkey had by far the highest inflation rate in the first quarter of 2022: an eye-opening 54.8%. Turkey has experienced high inflation for years, but it shot up in late 2021 as the government pursued unorthodox economic policies , such as cutting interest rates rather than raising them.

A bar chart showing that the U.S. inflation rate has almost quadrupled over the past two years, but in many other countries, it's risen even faster

The country where inflation has grown fastest over the past two years is Israel. The annual inflation rate in Israel had been below 2.0% (and not infrequently negative) every quarter from the start of 2012 through mid-2021; in the first quarter of 2020, the rate was 0.13%. But after a relatively mild recession , Israel’s consumer price index began rising quickly: It averaged 3.36% in the first quarter of this year, more than 25 times the inflation rate in the same period in 2020.

Besides Israel, other countries with very large increases in inflation between 2020 and 2022 include Italy, which saw a nearly twentyfold increase in the first quarter of 2022 compared with two years earlier (from 0.29% to 5.67%); Switzerland, which went from ‑0.13% in the first quarter of 2020 to 2.06% in the same period of this year; and Greece, a country that knows something about economic turbulence . Following the Greek economy’s near-meltdown in the mid-2010s, the country experienced several years of low inflation – including more than one bout of deflation, the last starting during the first spring and summer of the pandemic. Since then, however, prices have rocketed upward: The annual inflation rate in Greece reached 7.44% in this year’s first quarter – nearly 21 times what it was two years earlier (0.36%).

Annual U.S. inflation in the first quarter of this year averaged just below 8.0% – the 13th-highest rate among the 44 countries examined. The first-quarter inflation rate in the U.S. was almost four times its level in 2020’s first quarter.

Regardless of the absolute level of inflation in each country, most show variations on the same basic pattern: relatively low levels before the COVID-19 pandemic struck in the first quarter of 2020; flat or falling rates for the rest of that year and into 2021, as many governments sharply curtailed most economic activity; and rising rates starting in mid- to late 2021, as the world struggled to get back to something approaching normal.

But there are exceptions to that general dip-and-surge pattern. In Russia, for instance, inflation rates rose steadily throughout the pandemic period before surging in the wake of its invasion of Ukraine . In Indonesia, inflation fell early in the pandemic and has remained at low levels. Japan has continued its years-long struggle with inflation rates that are too low . And in Saudi Arabia, the pattern was reversed: The inflation rate surged during the pandemic but then fell sharply in late 2021; it’s risen a bit since, but still is just 1.6%.

Inflation doesn’t appear to be done with the developed world just yet. An interim report from the OECD found that April’s inflation rate ran ahead of March’s figure in 32 of the group’s 38 member countries.

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Essay on Global Economy

Students are often asked to write an essay on Global Economy in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Global Economy

What is the global economy.

The global economy is like a big market where countries are like shops. Each country sells things it makes and buys things it needs. Just like in a neighborhood store, there are many different products, from toys to clothes. But in the global economy, these products travel across oceans and skies from one country to another.

Money in the Global Economy

Money is the key to buying and selling in the global economy. Different countries have different types of money, called currencies. They trade these currencies, which change in value, just like the price of ice cream might go up or down.

Trade Between Countries

Countries trade with each other to get what they don’t have. Imagine trading your sandwich for your friend’s apple at lunch. Countries do the same with products like oil, food, and cars. This trading can help countries be friends and work together.

Jobs in the Global Economy

The global economy creates jobs all over the world. When a company in one country makes something, it might need parts from another country. This creates jobs in both places. It’s like when your whole class helps to make a big art project together.

Challenges in the Global Economy

Sometimes the global economy faces problems. If one country has a tough time, like getting sick, it can affect other countries too. It’s important for countries to help each other, like friends do, to keep the global economy strong and healthy.

250 Words Essay on Global Economy

The global economy is like a big market where countries sell goods and services to each other. Imagine your school as a small world where students trade snacks, toys, or help with homework. Now, think bigger: countries trade things like cars, food, and technology. This trade makes the world’s economy.

Money Around the World

In this market, countries use money to buy and sell, but not all money is the same. Each country has its own type of money, like dollars or euros. They swap these to trade. It’s like when you trade cards; some are worth more than others. This is called exchange rates.

Rich and Poor Countries

Some countries have lots of money and resources; we call them rich. Others have less, and we call them poor or developing. Rich countries often make more things and have better jobs. Poor countries may not have as much, but they are important too because they might grow food or have materials that rich countries need.

Jobs and Companies

Companies create jobs, making things or providing services. They can be in one country or many. When they are in many countries, they are called multinational companies. These companies help the global economy by giving people jobs and making things we all use.

The global economy can face problems. If one country has trouble, it can affect others. Like if a friend can’t trade snacks anymore, it changes what everyone else trades. Countries work together to solve these problems so that the global economy stays healthy.

In short, the global economy is how countries share what they make and what they have with the whole world. It’s important because it connects us all, just like friends in a schoolyard.

500 Words Essay on Global Economy

The global economy is a way to describe how the world’s countries are linked through buying and selling things to one another. Imagine it like a giant web where each thread connects countries, businesses, and people, allowing them to trade things like toys, clothes, food, and services. This web is very important because it helps countries grow by giving them a chance to sell what they are good at making and buy what they need from others.

Money is the main tool used in the global economy. Different countries use different types of money, like dollars, euros, or yen. When they trade with each other, they agree on how much one type of money is worth compared to another. This is called the exchange rate. The exchange rate changes all the time, which can make things cheaper or more expensive for different countries.

Trade is when countries sell and buy goods and services from each other. Some countries have lots of natural resources, like oil or wood, which they can sell to other countries that might not have as much. Other countries might be really good at making cars or electronics and sell these to places where making these items is harder. This buying and selling help countries make money and provide jobs for people.

Big Organizations

There are big groups that help manage the global economy. The World Bank and the International Monetary Fund (IMF) are two examples. They give advice and money to countries to help them develop and keep their economies stable. They also try to make sure that trade is fair and that poorer countries get a chance to grow.

The global economy faces many challenges. Sometimes countries disagree on trade rules, which can lead to fights or tariffs, which are special taxes on imported goods. This can make things more expensive. Also, if one country’s economy has problems, it can affect other countries. For example, if a big country like the United States or China slows down in buying things, other countries that sell to them might also struggle.

Technology and the Future

Technology is changing the global economy fast. With the internet, businesses can sell things to people all over the world. This makes it easier for even small businesses to be part of the global economy. In the future, technology will keep making the world’s economies more connected, which can lead to more growth and new jobs.

In conclusion, the global economy is like a big game where each country has a role to play. By understanding how money, trade, big organizations, challenges, and technology fit into this game, we can see how the world works together to make and sell things. It’s important for us to learn about the global economy because it affects our lives in many ways, from the price of the things we buy to the jobs that are available in our countries.

That’s it! I hope the essay helped you.

If you’re looking for more, here are essays on other interesting topics:

Essay on Inequality
Essay on Global Citizenship
Essay on Indian Tourism

Apart from these, you can look at all the essays by clicking here .

Happy studying!

Short Essay on Global Political Economy

Related Papers

kiky larasaty

* The contemporary international economic system is more closely integrated than in any previous era. The recession of 2008–9 provides a clear illustration of the relationship between trade, finance, international institutions, and the difficulties that governments face in coping with the problems generated by complex interdependence. Before 1945, the spectacular increase in economic integration that had occurred over the previous century was not accompanied by institutionalized governmental collaboration on economic matters. International trade patterns also changed very little over several centuries before 1945. The end of the Second World War marked a significant disjunction: global economic institutions were created, and the transnational corporation emerged as a major actor in international economic relations. Since the emergence of international political economy (IPE) as a major subfield of the study of international relations in the early 1970s, IPE scholars have generated an enormous literature that has been the product of the employment of a wide variety of theories and methods. Most introductions to the study of IPE have divided the theoretical approaches to the subject into three categories: liberalism, nationalism, and Marxism. This threefold typology is of limited utility today, given the overlap between many of the approaches classified in different categories, and the wealth of theories and methodologies applied in the contemporary study of global political economy.

halil kürşad aslan

Parakh Hoon

Ahmad A R I Irsal

Penny Intan

Rohan Kalyan

Bwite Lukama

Kees Van der Pijl

This was a text of 2009 for use in the Sussex Global Political Economy MA. Because it no longer appears under its original web address at the Sussex website I have downloaded the LibCom version.

This chapter presents three important IPE debates. They concern: (1) the exact relationship between politics and economics; (2) development and underdevelopment in the developing world; (3) the nature and extent of economic globalization. The last part of the chapter presents recent developments in theorizing on IPE. We emphasize that there is a growing concern about issues of wealth and poverty in many countries. For this reason, the IPE research agenda is of increasing importance.

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Global Economic History: A Very Short Introduction

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Global Economic History: A Very Short Introduction considers the wealth and economic history of countries worldwide. Why are some countries rich and others poor? The various factors that influence economic growth, including culture, globalization, institutions, technology, the natural environment, income distribution, and the standard of living are discussed. From the industrial revolution in Britain in the 18th and 19th centuries, the range of processes and developments that have led to economic growth in Western Europe, North America, China, India, South America, and Africa are considered. Historical examples to show the strengths and weaknesses of state intervention in the economy are also used.

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The Global Economic Crisis Essay

I could never have thought that the world’s economy could be brought down on its knees in such a short while if you would have asked me before the economic crisis hit. Yet again, it’s not like there was a war looming in the air to contribute to this or anything. My view is that the great depression of the 1930s could be excused because the globe was just coming to form the repercussions of the First World War, and again the Second World War was just lingering in the air.

Many parties are to blame for the global economic crisis. These range from the economists with their low forecasts to central banks with poor policies through regulatory institutions that could not develop proper frameworks to govern the innovations in the financial markets. Financial institutions are also to blame for entering into hapless deals that almost brought the global economy tumbling in doom.

Blame time is over, and the blame game is not equally going to take the global economy to higher heights. Lessons and a myriad of them, for that matter, have been drawn to our attention as individuals, governments, institutions, and businesses. However, these lessons can only be beneficial when a proper review of the leading causes, effects, and effectiveness of the remedies is evaluated. My honest opinion would then be that teams of professionals be set up to look at all these items and then come up with policies that will be able to maneuver around such challenges in the future.

I have personally been able to make several inferences from the causes of the effects and the strategies that governments tried to apply to alleviate the situation. My approach to personal finances, business approach, and home establishments has been renewed. For example, at my privately owned equity firm where I work, I realized that the types of assets held by an organization are fundamental. I would not have made this statement this authoritatively had the financial crisis not occurred. Financial institutions lost a great deal as relates to toxic assets and bad loans. In as much as a business and as an individual, I do have assets; I believe the levels of asset volatility need to be weighed first. In as much as toxic assets need to form the asset structure, they should be held in moderation.

Being in a buy out firm in France, I noted with keen interest that speculators were venturing into buyouts at this particular time. This was the case because some investors could not foresee that this crunch was going to last long. This speculation made persons buy firms at an overvalued price only to realize that the crisis was ongoing and were making losses. From this, I believed that during such swings in the economic cycle, getting into buy out was tantamount to gambling. Further, organizations venturing into the buyout would end up in worse situations since they would have to offset the debt they had incurred before launching the buyout. Secondly, they would have to bear the losses that the firms that they were acquiring were making.

This also applies to real-life scenarios in my life. As a person, I have come to realize that I should not make snap decisions, especially when conditions are so volatile. There are moments when I am faced with challenges, and I have to come up with solutions. Say when I have argued with a close friend and I need to decide on the direction of our friendship, I have learned that emotions or short term excitements are not meant to inform the kind of decisions that I am to take in life. Integrity, to me, is core. I hold on to it so dearly. However, the global economic crisis occurrences just worked to open my eyes to how much our society currently lacks integrity. Talk of the banks that would offer loans at adjustable interest rates, which is not brought to the full attention of the customers who ended up suffering in the long run. This has worked to change my perception of banks and other financial institutions. My dealings with them are now with much more caution.

Another aspect of my perception that has been influenced is that investments that people make in the company stocks are beneficial but face much more vulnerabilities than when persons invest in government bonds and bills. This thought has been influenced because the wealth levels of individuals met a nose dive as the S&P 500 was down by 45% in early November of 2008 from the high experienced in 2007. I there tend to be more risk-averse in my dealings and trades more than a risk-taker. In a nutshell, my risk attitudes have since changed. As I trade currencies, for example, I would love to use small margins and small lot sizes so that if I was to incur a loss, then it is totally minimized. This means that the profits that I take in these trades are also little. However, this does not mean that as a person, I am not rational so as to prefer small to more. On the contrary, I am very reasonable, but I would love to consider caution in my rationality.

Basing on the movement of savings and investments droning the onset of the economic crisis, I have determined that persons need to indulge in proper budgetary allocations. This will involve persons setting aside funds for investments, savings, and consumption. This setting aside of funds, as I later came to realize, should be well determined by taking into account the inflationary tendencies and price level changes. This is because savings and investments were also falling drastically at the onset of the credit crunch. The fed reserve has experienced a shift in role from the lender of last resort to be the lender of only resort. The downfall of the S&P 500 influenced my perception of equity sources of finance. To some point, I have come to believe that debt capital should be considered just as equally as equity is.

The way warning signs should be treated in organizations, for me, was much influenced by the happenings of the global economic crisis. I have come to form the opinion that however baseless allegations in an institution seem to be, consideration for them should be given. This is because effects at first were sidelined with governments and ministers of finance while political leaders were working to alleviate fears of the magnitude of the ramifications to be expected. In as much as some sideshows in an organization may serve to waste organization time, I am now of the opinion that firms need to set up ad hoc committees that will spare some time to handle any issues coming up in the organization; however small they may appear. With the effects of this economic crisis, other countries could not get an opportunity to sell their consumer products. The previous perception I had was that the trickle-down result of a financial mishap could not affect other countries as gravely as it did affect countries like Cambodia. This has made me view partners and other stakeholders carefully in terms of what happens in their realm and the possible ramifications in the whole industry that as a business I operate in.

The unemployment that followed the global economic crisis kept me thinking of ways that firms may engage in so as to limit the cases of unemployment. I was an ardent supporter of job specialization and the benefits thereof. I have to mention now that I consider that to be a cause of unemployment at times. My view is that once one joins a firm, there needs to be continuous training and job rotation so that in cases when some units or departments have to be closed, still the employees will have something to do other than remaining redundant. Further, I have come to realize that sustainable employment is essential in an organization. My thinking has been changed from job specialization to job diversification. As an organization, we should be in a position to employ multi-skilled workers and reduce job losses that are created by economic downturns.

The world was caught off guard by the global economic crisis. Leaders and policymakers had to keep shoving in the dark, trying to find solutions; some of them ended up deepening the already gross state of the economies. This got me thinking; what if, as a business, we did simulate possible grave positions and the solutions that would relate to them? Won’t that make it much more straightforward when faced with such challenges? For me, the answers to the two questions were yes and yes. The government of the US came in to bail out the central banks. As a business, my thought was if there was going to be another institution that would bail us out if we went crumbling. This placed an idea of having to diversify investments in various places and industries so that one sector would help should the other in times of financial crises.

My perception of government participation in business operations has changed at the onset of the bailout and the support that the firms got from the Obama administration. Previously my thoughts were that businesses should be allowed the autonomy to operate with minimum interference from the government. Considering what the US government did to salvage the awkward position that the central banks on Wall Street were in, the justification for government involvement in private business tends to make more sense for me as an individual. Another corrective strategy involved the use of regulatory responses for the financial institutions. I am now of the opinion that a business needs to come up with a dynamic yet consistently updated code of ethics to improve its performance.

I have come to the realization that as an organization, challenges are bound to face us, but the approach that we need to give it should be procedural. The global economic crisis was a challenge that posed great a question as to how issues need to be solved. As persons and as organizations, we do not try to give haphazard solutions or tries that are not well thought of. My perception now is that quick fixes are not the best solution to problems. Instead, the root cause of the problem needs to first be identified and then a procedural methodology given to the challenges that we are exposed to. The approach that the global economic crisis was given was, to some extent, a trial and error approach. Governments and institutions would come up with suggestions and possibilities without a clear understanding of what magnitude those solutions would work to solve the problems that had cropped up.

One of the possible solutions to the global economic crisis that has long affected my view of issues is that of the stimulus package that the governments, and especially the US government, did give. In a way, the stimulus package was being contributed towards by the taxpayers’ money.

In as much as the ramifications were not to be felt in the short run, the long-run effects were going to be gross on the citizens. I now look at business solutions differently. As an organization, I would like to determine how much we are going to suffer in the long run as a business. On the other optimistic side, I would first love to pick how much I am to gain by choosing a specific remedial action.

The last lesson that is worth mentioning is that: trouble does not last forever. With the current improvements that are noticeable and the optimism in the air, it only serves to teach me that I should never give up in life. However, challenging circumstances may appear; there always lays a solution for them. Now than ever before, hope is my friend but hope with effort, resilience, and perseverance. I recognize that nothing comes easy and that I need to be diligent and focused on my action. Along the way, sometimes I may face distracters, but while holding on steadfastly to my dreams, I am bound to soar high with wings like eagles.

The global economic crisis has informed my opinion in several ways about how to source funds, where to invest, and government participation in businesses. Stakeholder effects have since gained much more importance from my perspective. It is unfortunate that such world-shaking occurrences are the ones to inform our thinking but still, the lessons learned are to be appreciated. As an individual, I now know that investment should not be haplessly made based on the profitability of the firm but that there are other canons to be considered. As a government, I realize we need teams in place to not only set up policies but also carry out continuous monitoring of the same. I pray that every other stakeholder has learned something from the effects of the global economic crisis.

Chicago (A-D)
Chicago (N-B)

IvyPanda. (2021, February 27). The Global Economic Crisis. https://ivypanda.com/essays/the-global-economic-crisis-essay/

"The Global Economic Crisis." IvyPanda , 27 Feb. 2021, ivypanda.com/essays/the-global-economic-crisis-essay/.

IvyPanda . (2021) 'The Global Economic Crisis'. 27 February.

IvyPanda . 2021. "The Global Economic Crisis." February 27, 2021. https://ivypanda.com/essays/the-global-economic-crisis-essay/.

1. IvyPanda . "The Global Economic Crisis." February 27, 2021. https://ivypanda.com/essays/the-global-economic-crisis-essay/.

Bibliography

IvyPanda . "The Global Economic Crisis." February 27, 2021. https://ivypanda.com/essays/the-global-economic-crisis-essay/.

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Clean energy is boosting economic growth

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IEA (2024), Clean energy is boosting economic growth , IEA, Paris https://www.iea.org/commentaries/clean-energy-is-boosting-economic-growth, Licence: CC BY 4.0

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Clean energy is moving towards centre stage in the global energy system – and as its importance rises, a new clean energy economy is emerging .

Clean electricity accounted for around 80% of new capacity additions to the world’s electricity system in 2023, and electric vehicles for around one out of five cars sold globally. At the same time, global investment in clean energy manufacturing is booming, driven by industrial policies and market demand. Employment in clean energy jobs exceeded that of fossil fuels in 2021 and continues to grow.

Quantifying the expanding role of clean energy in the economy is therefore essential to fully understand the stakes and momentum behind energy transitions.

Clean energy accounted for 10% of global GDP growth in 2023

Our new country-by-country and sector-by-sector analysis finds that in 2023, clean energy added around USD 320 billion to the world economy. This represented 10% of global GDP growth – equivalent to more than the value added by the global aerospace industry in 2023, or to adding an economy the size of the Czech Republic to global output.

This assessment is based on a first-of-its-kind analysis of three categories of activity in the clean energy sector:

Manufacturing of clean energy technologies : investment in clean energy manufacturing, covering the value chains for solar PV, wind power and battery manufacturing
Deployment of clean power capacity : investment in deployment of clean electricity generation capacity – such as solar PV, wind power, nuclear power and battery storage – and in electricity networks
Clean equipment sales : sales of electric cars (EVs) and heat pumps.

It is based on detailed project-by-project data gathered and processed by the International Energy Agency (IEA) from primary and secondary sources. We conducted this analysis at the country level, and present here the in-depth results for four of the largest economies: the United States, the European Union, China and India, which together account for two-thirds of global GDP. 1

GDP in the United States grew by a robust 2.5% in 2023. Clean energy was an important contributor: The Inflation Reduction Act and the Bipartisan Infrastructure Law drove a surge in investment in clean energy manufacturing, and sales of EVs also grew strongly. Consequently, clean energy growth accounted for around 6% of GDP growth in the world’s largest economy in 2023. This is comparable in scale to the contribution to GDP growth in 2023 from the United States’ booming, artificial-intelligence-driven digital economy. 2

Clean energy accounted for around one-fifth of China’s 5.2% GDP growth in 2023. Each of the three categories assessed grew strongly, with the largest increase coming from investment in clean power capacity, followed by clean equipment sales, particularly EVs. Expansion in clean energy manufacturing accounted for around 5% of China’s GDP growth in 2023, although the country’s surplus production capacity in technologies such as batteries (utilisation rates were around 30% in 2023) may limit the scope of this growth driver going forward. Similar assessments have come to comparable conclusions, albeit with slightly different boundaries.

In the European Union, clean energy accounted for nearly one-third of GDP growth in 2023, the highest share of any region assessed, although its share is inflated by weak overall GDP growth of around 0.5%. Nonetheless, the EU’s strong climate targets and policies, such as the Fit for 55 package and the proposed Net Zero Industry Act, are supporting investments in clean energy manufacturing, which more than doubled between 2022 and 2023, driven in particular by battery manufacturing.

India was the fastest growing large economy in 2023, with GDP increasing by around 7.7%. Clean energy contributed slightly less than 5% of GDP growth in 2023, predominantly from investment in new solar power capacity. Meanwhile, policies such as the Production Linked Incentive are attracting investment in new clean energy manufacturing capacity. In 2023, this remained relatively small as a portion of India’s overall economy, but interest from businesses and investors is increasing.

Contribution of investment and sales in selected clean energy technologies to GDP growth, 2023

Assessing the extent to which different sectors of the clean energy economy contribute to GDP growth from year to year helps show the direction of travel. Yet looking at their share of GDP in a single year is also useful in understanding their economic importance. In 2023, clean energy investment and sales accounted for between 1% and 4% of total GDP in the four major regions assessed – substantial shares in the context of these large and diversified economies. The chemicals industry accounts for about 3% of value added in India and China. Clean energy technologies therefore already provide a sizable contribution to GDP in these economies today.

The clean energy sector also drove a substantial share of total investment growth across the economy in these regions in 2023. In the case of China, it contributed 50% of the growth in total investment in 2023, and 20% in the United States. At the global level, we estimate that around USD 200 billion was invested in clean energy technology manufacturing in 2023, an increase of 75% over the previous year. This compares with global capital investment in semiconductor manufacturing of around USD 170 billion to 250 billion per year in recent years.

Share of investment and sales in selected clean energy technologies in GDP, 2023

Share of investment in selected clean energy technologies in total investment, 2023.

This analysis highlights the scale and weight of the clean energy economy. It shows that it is not only growing quickly, but also has already become a powerful economic force. As energy transitions advance, clean energy’s importance for economies around the world is only set to grow further.

Modernising energy and industrial systems to drive energy transitions requires very large investments and the transformation of huge markets. It also comes with many significant benefits beyond mitigating climate change and reducing air pollution alone; in 2023, 36 million workers were employed across clean energy supply chains.

And while China still leads in investment in the manufacturing of clean energy technologies, other regions are also seeing a jump in projects and investments. The large share of one country has raised questions about the resilience and diversity of global clean energy technology supply chains, but it also currently provides opportunities to accelerate global decarbonisation based on an abundant supply of low-cost clean energy equipment. The analysis developed here highlights the importance of comprehensively assessing the size of the clean energy economy when designing energy, climate and industrial policies.

The estimates for investment in the manufacturing of clean energy technologies come from a first-of-its-kind analysis that builds on methodologies developed in the IEA’s The State of Clean Technology Manufacturing report and Energy Technology Perspectives reports. The detailed findings will be presented in the upcoming Energy Technology Perspectives Special Report Advancing Clean Technology Manufacturing , requested by G7 Leaders at the 2023 Hiroshima Summit in Japan. Investment in the deployment of clean power capacity comes from the forthcoming edition of our World Energy Investment series. Macroeconomic data comes from Oxford Economics, based on national sources, in order to ensure cross-country consistency.

In 2023 , the “data processing, internet publishing, and other information services” sector contributed around 9% to real growth in gross value added (GVA).

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The Global Turn Away From Free-Market Policies Worries Economists

More countries are embracing measures meant to encourage their own security and independence, a trend that some say could slow global growth.

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Kristalina Georgieva, wearing a floral jacket, speaks at a lectern with a green background behind her.

By Patricia Cohen

Reporting from London

Meeting outside Paris last week, top officials from France, Germany and Italy pledged to pursue a coordinated economic policy to counter stepped-up efforts by Washington and Beijing to protect their own homegrown businesses.

The three European countries have joined the parade of others that are enthusiastically embracing industrial policies — the catchall term for a variety of measures like targeted subsidies, tax incentives, regulations and trade restrictions — meant to steer an economy.

More than 2,500 industrial policies were introduced last year, roughly three times the number in 2019, according to a new study . And most were imposed by the richest, most advanced economies — many of which could previously be counted on to criticize such tactics.

The measures are generally popular at home, but the trend is worrying some international leaders and economists who warn that such top-down economic interventions could end up slowing worldwide growth.

The sharpened debate is sure to be on display at the economic lollapalooza that opened Wednesday in Washington — otherwise known as the annual spring meetings of the International Monetary Fund and the World Bank.

“There are different ways of shooting yourself in the foot,” M. Ayhan Kose, the deputy chief economist of the World Bank, said about the trend of rich countries pursuing industrial policies. “This is one way of doing it.”

And in a speech last week, Kristalina Georgieva, the I.M.F.’s managing director, cautioned that except in extraordinary circumstances, the case for government intervention was weak.

Whether and how ardently governments should try to control their economies has been vigorously debated since the Industrial Revolution. The current wave of policies, though, is a stark contrast to the classic open markets, hands-off government ideology championed by the citadels of capitalism in recent decades.

That faith in the superiority of free-market policies was deeply shaken in recent years by a string of global jolts — the pandemic, supply chain meltdowns, soaring inflation and interest rates, Russia’s invasion of Ukraine, and rising tensions between the United States and China.

In many capitals, security, resilience and self-sufficiency were pushed to the front of the list of economic policy goals along with growth and efficiency.

After years of complaints about China’s subsidies of private and state-owned industries, the United States and Europe have increasingly copied Beijing’s playbook, undertaking multibillion-dollar industrial policies focused on critical technology and climate change.

The United States passed two mammoth bills in 2022 to strengthen its domestic semiconductor industry and renewable energy sector. Europe passed its own Green Deal Industrial Plan last year to speed the energy transition. Soon after, South Korea approved the K-Chips Act to support its semiconductor production.

“A few years ago, when I was starting out as finance minister, you couldn’t pronounce the words ‘European economic policy’ or ‘European industrial policy,’” Bruno Le Maire, France’s finance minister, said last week after the ministers’ meeting.

Their embrace of industrial policies hasn’t stopped Western countries from criticizing China’s tactics. Last year, the European Union accused China of flooding the market with cheap electric vehicles subsidized by the government.

This week, U.S. Treasury Secretary Janet L. Yellen complained that Chinese subsidies of green energy were pushing American and European firms out of business.

And on Wednesday President Biden called for major increases in some tariffs on steel and aluminum products from China in response to a flood of subsidized Chinese exports to the United States.

In general, positive appraisals of industrial policies have grown in recent years. One overview of the subject by a team that included Dani Rodrik, a Harvard economist, found that the “recent crop of papers offers in general a more positive take on industrial policy,” compared with the traditional “knee-jerk opposition from economists.”

Joseph E. Stiglitz, a Nobel Prize-winning professor at Columbia University, has called industrial policy a “no-brainer.”

But many economists like Mr. Kose of the World Bank remain skeptics, arguing that most industrial policies will end up reducing overall growth, making things worse rather than better.

In response to the latest wave of interventions, the I.M.F. has drawn up a new set of guidelines for when and how industrial policies should be carried out.

There are gains, if they are done right and used to address an extraordinary market failure, like the dangers posed by climate change, the I.M.F. said. That means clearly identifying the social benefits like limiting greenhouse gases, broadly sharing innovations across borders and refraining from discriminating against foreign firms.

But much of the analysis was devoted to how easy it is to get things wrong, by misallocating or wasting money, giving powerful business interests too much sway over government decisions or setting off a tit-for-tat trade war.

“What stands out about this current resurgence is that there is a reliance on costly subsidies,” said Era Dabla-Norris, an author of the analysis. And these are often “combined with other types of discriminatory measures against foreign firms.”

When protectionist measures distort global trade and investment flows, she said, “the global economy loses out.” Such policies can make production more expensive, causing prices to rise.

Governments meddle in markets for all kinds of reasons — to prevent job losses, spur investments into a particular sector or freeze out a geopolitical rival.

Of the 2,500 interventions introduced last year, protecting domestic industries accounted for the largest chunk, followed by combating climate change or shoring up supply chains, according to a study done in conjunction with the I.M.F. Measures that cited national security as the motivation made up the smallest share.

The data also suggested that when a country introduced a subsidy, there was roughly a 75 percent chance that within a year, another country would introduce a similar one on the same product.

In any case, as fears about Europe’s ability to compete with the United States and China increase, the European Union seems determined to move ahead with more coordinated economic interventions — even though its members do not necessarily agree on which ones.

France has proposed the most aggressive measures, including a provision to reserve half of public spending from industrial policy on European-made products and services, while Germany has been more skeptical of Buy Europe approaches.

But there is support across the board for increasing funding, slashing cumbersome regulations and promoting a single market for investments and savings.

In February, the European Parliament agreed to increase its own green industrial capacity, and in March, the bloc adopted regulations to secure its supply of essential raw materials and bolster local production. Members also proposed for the first time a joint defense industrial strategy .

The French, German and Italian economic ministers have been gathering to develop policies to stimulate green and digital technologies before E.U. leaders meet this year to adopt a new five-year strategic plan .

Now that “the term ‘industrial policy’ is no longer taboo,” said Mr. Le Maire, France’s finance minister, “Europe needs to show its teeth, and show that it’s determined to defend its industry.”

Patricia Cohen writes about global economics and is based in London. More about Patricia Cohen

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International Edition

7 ways to boost e-waste recycling – and why it matters

Domestic appliance e-waste being recycled.

An estimated 62 billion kilogrammes of e-waste was produced in 2022. Image: Unsplash/John Cameron

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.chakra .wef-9dduvl{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-9dduvl{font-size:1.125rem;}} Explore and monitor how .chakra .wef-15eoq1r{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;color:#F7DB5E;}@media screen and (min-width:56.5rem){.chakra .wef-15eoq1r{font-size:1.125rem;}} Circular Economy is affecting economies, industries and global issues

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.chakra .wef-1nk5u5d{margin-top:16px;margin-bottom:16px;line-height:1.388;color:#2846F8;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-1nk5u5d{font-size:1.125rem;}} Get involved with our crowdsourced digital platform to deliver impact at scale

Stay up to date:, circular economy.

This article was originally published on 14 February 2024 and updated on 15 April 2024.

E-waste, or waste electrical and electronic equipment, is the fastest-growing waste stream globally, with an estimated 62 billion kilogrammes produced in 2022 alone.
But the phones, tablets, laptops and other gadgets we discard contain valuable metals and minerals, collectively worth $62.5 billion each year.
With currently only about one-fifth of the world's e-waste recycled, a World Economic Forum report underscores the need for systemic change to encourage industries to embrace the circular economy.

Technological advancements continue to transform our world, but the result is a cascade of unwanted devices that are becoming the fastest-growing waste stream on the planet.

Global e-waste almost doubled in the past 12 years reaching 62 billion kilogrammes (kg) in 2022, and is projected to increase to 82 billion kg by 2030.

The total of 62 billion kg of e-waste generated in 2022 is enough to fill 1.55 million 25-metre-long trucks forming a bumper-to-bumper traffic jam stretching 40,000 kilometres around Earth's equator, according to The Global E-waste Monitor 2024 report produced by the United Nations.

However, just over 22% of all that waste was formally collected and recycled, the report notes.

Our discarded phones, tablets, laptops and other gadgets are worth $62.5 billion each year and, per tonne, contain 100 times more gold than the same weight of gold ore. And, yet, only about one-fifth of the world’s e-waste is recycled.

But here are seven initiatives aimed at boosting e-waste recycling rates to reuse the valuable metals and minerals contained in our old devices.

1. Colourful collections

Cambridge City Council in the UK now provides bright pink bins to collect residents’ discarded small electrical goods and reduce the quantity of e-waste that ends up in regular recycling collections.

These appliances cannot be included in curbside recycling bins, but they contain much-needed materials like copper and lithium.

Around 49 tonnes of small electrical appliances have been deposited into the eye-catching collection bins since they were installed in 2022, ready for reuse or recycling.

2. Egypt’s e-waste app

Policymakers in Egypt have launched the E-Tadweer mobile application, which uses technology to tackle the country’s growing e-waste challenge .

The app enables end-users to take their unwanted appliances to dedicated delivery points and exchange them for vouchers, which can be used to purchase new electronic goods from stores that have joined the scheme.

Safe recycling of electronic devices helps prevent harmful chemicals contained within, such as mercury or lead, from finding their way into soil and waterways.

The World Economic Forum Centre for Nature and Climate is actively promoting the transition to a circular economy through various initiatives. The objective is to create a more sustainable and resilient economic system by reducing waste and maximizing resource efficiency.

The Circular Transformation of Industries initiative engages leaders from industry, government, academia, and civil society to drive circularity across sectors and economies. It consolidates information from previous efforts, shares best practices and creates new partnerships. Learn more about Unlocking New Value in a Resource-Constrained World .
The Circular Cars Initiative aims to create a climate-friendly automobility system by minimizing lifecycle emissions, particularly in manufacturing. Its goal is the development of a convenient, affordable, 1.5°C-aligned system by 2030. Discover the benefits of circular economy in the car industry here .
The Global Plastic Action Partnership (GPAP) brings together global stakeholders to promote the transition to a circular plastics economy. GPAP provides a platform for global learning and local action in nine countries coordinating efforts and maximizing impact. Learn more in our Impact Report .

3. Precious metals from the Royal Mint

The Royal Mint, noted for producing coinage for the UK and more than 30 other nations, is developing a new process to reclaim gold and other precious metal deposits from discarded electronic devices.

Together with Canadian start-up Excir, researchers have invented a patented process that they claim can extract 99% of the gold held on a printed circuit board found inside laptops, cell phones and other devices.

Royal Mint engineers are working to scale this quick, sustainable chemical process that operates at room temperature. The recovered gold will be melted into ingots ready for use in Royal Mint products.

4. Singapore’s policy and community fixes

The island state of Singapore generates an estimated 60,000 tonnes of e-waste each year, and with land in limited supply, the problem of what to do with it is high on the agenda.

At the state level, Singapore’s policymakers have put in place progressive legislation making it the producer's responsibility to collect end-of-life electrical appliances and electronic devices , and send them for reuse or recycling.

At community level, the Repair Kopitiam – which means “coffee shop” in Malay – initiative relies on a network of local volunteers who work out of community centres to help local people repair old or broken appliances and electronics so they can be reused rather than discarded.

Have you read?

What is urban mining – and why do we need to do more of it, why understanding mineral associations is key to managing the critical minerals supply gap, what's the best way to handle e-waste, including old phone chargers, 5. repair and reuse cafes.

Repair cafes or centres like those in Singapore, where in-the-know volunteer repairers help people extend the useful life of their appliances and devices , have been around for many years in parts of Europe and elsewhere.

The growing influence of the circular economy is highlighted in a 2018 European Union survey, which found that almost two-thirds of Europeans would rather repair products than buy new ones .

And countries like France are supporting this drive to avoid e-waste, with the country’s National Assembly voting to create a repairability index of electrical and electronic equipment , to boost the repair rate by 60% within five years of the legislation.

6. Northern Africa's e-waste legislation

Some countries in Northern Africa are turning to legislation to resolve their e-waste challenges, according to the UN's latest e-waste report.

Egypt has established a new regulatory agency for its waste management industry , and has further enforced a ban on imports of hazardous substances and wastes, including e-waste resulting from electrical and electronic equipment (EEE).

Tunisia has also moved to regulate e-waste, drafting a decree to establish a polluter-pays system for importing EEE.

E-waste collection and recycling centres are in operation at varying levels in both countries.

7. Taiwan's better-by-design approach

The Taiwanese government has established a legal framework to regulate and manage effective disposal and recycling of e-waste.

Under the legislation, manufacturers and importers of electronic goods are required to design products with recycling in mind, as well as establish collection systems and finance recycling and disposal of e-waste, making them responsible for the entire lifecycle of the products they produce.

The World Economic Forum’s Circular Transformation of Industries: Unlocking New Value in a Resource-Constrained World report, points to the systemic change required to bring about a circular transformation of industries to help unlock productivity, innovation and sustainability gains.

Higher global consumption of e-goods, shorter product life cycles and fewer repair options mean the amount of unwanted phones, laptops and other items is soaring. However, changing attitudes to the circular economy mean initiatives aimed at reusing and recycling e-waste could help us use precious metals and minerals more sustainably.

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4 innovations helping the fashion industry embrace the circular economy

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COMMENTS

Reimagining the global economy: Building back better in a ...
In this collection of 12 essays, leading scholars affiliated with the Global Economy and Development program at Brookings present new ideas that are forward-looking, policy-focused, and that will ...
How does the global economy work?
The global economy comprises several characteristics, such as: Globalisation: Globalisation describes a process by which national and regional economies, societies, and cultures have become integrated through the global network of trade, communication, immigration, and transportation. These developments led to the advent of the global economy.
The Global Economic Outlook During the COVID-19 Pandemic: A Changed World
The June 2020 Global Economic Prospects describes both the immediate and near-term outlook for the impact of the pandemic and the long-term damage it has dealt to prospects for growth. The baseline forecast envisions a 5.2 percent contraction in global GDP in 2020, using market exchange rate weights—the deepest global recession in decades ...
PDF Essay
Essay "A Perspective on the Global Economy and the Role of the IMF" In this essay, I argue that the IMF can contribute more effectively to the global economy as a platform for international dialogue if some improvements are achieved. I first point out several changes in the economic environment brought by globalization. Next, I adduce a
PDF The Global Economy
III Short-Term Economic Performance 121 10 Business-Cycle Properties 127 ... Global Economy team: Dave Backus, Gian Luca Clementi, Tom Cooley, Joe Foudy, Kim Ruhl, Kim Schoenholtz, Laura Veldkamp, Venky Venkateswaran, Paul Wachtel, Mike Waugh, and Stan Zin. This set of notes is available on-
Global Economic Prospects: The Global Economy: on Track for Strong but
A year and a half since the onset of the COVID-19 pandemic, the global economy is poised to stage its most robust post-recession recovery in 80 years in 2021. But the rebound is expected to be uneven across countries, as major economies look set to register strong growth even as many developing economies lag.
Chapter 1. The economic impacts of the COVID-19 crisis
WDR 2022 Chapter 1. Introduction. Chapter 1. The economic impacts of the COVID-19 crisis. The COVID-19 pandemic sent shock waves through the world economy and triggered the largest global economic crisis in more than a century. The crisis led to a dramatic increase in inequality within and across countries. Preliminary evidence suggests that ...
PDF BUILDING BACK BETTER IN A POST-COVID-19 WORLD
REIMAGINING THE GLOBAL ECONOMY: ... short term and beyond, as well as what will be its lasting effects. What is clear, however, ... In Essay 1, authors
The Future of Finance and the Global Economy: Facing Global Forces
As we look ahead toward the world of 2040 — aiming to foresee how the economy, the financial sector, and society will take shape — Daniel's first question asks us to discern the major factors that will shape the economy and society by mid-century. Overall, many scholars and many policymakers have largely agreed that five key global forces will be pivotal in influencing the economy of the ...
5 things you should know about the state of the global economy
5) Countries need to do more to address the uneven impact of the COVID-19 crisis. There is an urgent need for countries to formulate better targeted and gender-sensitive policies to drive a more resilient and inclusive recovery from the crisis. Though on the frontlines of the pandemic, women have been under-represented in pandemic related ...
Global economy
Global economy - Statistics & Facts. Worldwide. Since 2020, the world has seen two crises that have had a massive impact on the global economy. First, as the coronavirus (COVID-19) started ...
Global Economy
Global economy facilitates global trade, financial flows, and the effects of globalization on economic systems. It impacts the prices of goods and services, employment levels, inflation, income levels, and living standards globally. It also influences alliances, the environment, diplomatic relations, and matters of climate change.
Global Economic Crisis and Global Development: Reflections on the
Politics/Political Economy Institute, University of Manchester. The task of this essay is to reflect, necessarily tentatively and speculatively, actual and potential implications of the global economic crisis of the late global development. Using a conception of development which centres on inequality and vulnerability among groups of people ...
Essay on Global Economy
Essay on Global Economy - Short Essay, 10 Lines, 500 & 1000 Words. December 27, 2023 by Sample Essay. Essay on Global Economy in English: This essay delves into the complexities of the global economy, exploring key factors that shape its dynamics, the impact of globalization, challenges and opportunities for nations, and the role of ...
Inflation around the world, over the past two years
Produce prices are displayed at a grocery store on June 10, 2022, in New York City. (Spencer Platt/Getty Images) Two years ago, with millions of people out of work and central bankers and politicians striving to lift the U.S. economy out of a pandemic-induced recession, inflation seemed like an afterthought.A year later, with unemployment falling and the inflation rate rising, many of those ...
Essay on Global Economy
The global economy is like a big market where countries sell goods and services to each other. Imagine your school as a small world where students trade snacks, toys, or help with homework. Now, think bigger: countries trade things like cars, food, and technology. This trade makes the world's economy.
Short Essay on Global Political Economy
For this reason, the IPE research agenda is of increasing importance. Download Free PDF. View PDF. Review Essay 1 INRL7002: Global Political Economy SIBTAY SHAHEED 15045652 Word count: 1500 • LIST A: The Politics of International Economic Relations 1. Ikenberry, J.G (2010) 'The Liberal International Order and its Discontents'.
Global Economic History: A Very Short Introduction
Abstract. Global Economic History: A Very Short Introduction considers the wealth and economic history of countries worldwide. Why are some countries rich and others poor? The various factors that influence economic growth, including culture, globalization, institutions, technology, the natural environment, income distribution, and the standard of living are discussed.
PDF Essays on Globalization and Economic Development
This thesis investigates the role of globalization in economic development. This thesis consists of three essays. The rst essay studies the role of resource reallocation and globalization in economic development for China. Recent literature on economic growth empha- sizes the misallocation of resource at the micro level could reduce TFP at the ...
Reflections on Progress: Essays on the Global Political Economy ...
The essays are organized in three sections: global economic interdependence, inequality and the political economy of reform, and the specific challenge of Europe.br/br br/br The common theme is the need for growth-oriented and socially inclusive policymaking in an interdependent world.
Global Economy
Global economy also influences the world economic perspective for a long time. As stated by the financial and economic projections based on the models of demographic trends and capital productivity, the GDP in emerging market economies in 2019 are expected to keep increasing at a positive rate. Global economy has many positive and negative effects.
Global Economy Short Essay Examples
Research Papers and Essay About Global Economy🗨️ More than 30000 essays Find the foremost Global Economy Essay Topics and Ideas to achieve great results!
Global Economy Essay
The Impact Of Censorship On The Global Economy Essay. perception of Syria is worse this year than it was a year ago, still 59% of the population don't wish the government to get more involved (Polling Report, 2016). As a result, the USA and the EU try to compensate through their influence over the global economy.
The Global Economic Crisis
The Global Economic Crisis Essay. I could never have thought that the world's economy could be brought down on its knees in such a short while if you would have asked me before the economic crisis hit. Yet again, it's not like there was a war looming in the air to contribute to this or anything. My view is that the great depression of the ...
Clean energy is boosting economic growth
Clean energy accounted for 10% of global GDP growth in 2023. Our new country-by-country and sector-by-sector analysis finds that in 2023, clean energy added around USD 320 billion to the world economy. This represented 10% of global GDP growth - equivalent to more than the value added by the global aerospace industry in 2023, or to adding an ...
The Global Turn Away From Free-Market Policies Worries Economists
Joseph E. Stiglitz, a Nobel Prize-winning professor at Columbia University, has called industrial policy a "no-brainer.". But many economists like Mr. Kose of the World Bank remain skeptics ...
The Managing Director's Global Policy Agenda, Spring Meetings 2024
The global economy has shown remarkable resilience, and appears headed for a soft landing. But buffers have been eroded, growth prospects are lackluster, and vulnerable countries are at risk of falling further behind. While inflation has fallen, it remains above target in many countries. Against this background, the key policy priorities are to: (i) rebuild buffers; (ii) revive medium-term ...
The shadow of war darkens on the global economy
Short-term performance has been surprisingly good but policymakers are walking on eggshells. ... ChatGPT essay cheats are a menace to us all ; ... The shadow of war darkens on the global economy.
Earth Day: What is it, when is it and why is it important?
It was originally published on 19 April 2022. Earth Day takes place every year on 22 April and is one of the biggest environmental protest movements on the planet. The theme of Earth Day this year is 'Planet vs. Plastics' - campaigners are calling for a 60% reduction in the production of plastics by 2040. The World Economic Forum's Global Risks ...
7 ways to boost e-waste recycling
Global e-waste is predicted to reach 74.7 million tonnes by 2030. Image: UNU, ITU and ISWA. 1. Colourful collections. Cambridge City Council in the UK now provides bright pink bins to collect residents' discarded small electrical goods and reduce the quantity of e-waste that ends up in regular recycling collections.