There are several factors that affect the global economy. Among them are the COVID-19 pandemic, the Unemployment rate in developing countries, trade liberalization, and climate change. The following are some of the most important factors that impact the global economy. You can read about them in this article. Here, we will discuss these and other factors in greater detail. Let us begin! We shall begin with global trade and economic activity. Afterwards, we will talk about the effect of trade on the global economy.
Impact of COVID-19 pandemic on global economy
In addition to the impact of the COVID-19 pandemic on the world economy, this outbreak also affects the economic performance of emerging market countries. These countries already face a range of problems, including weak health care systems, loss of trade and tourism, dwindling remittances, and tight financial conditions. The COVID-19 pandemic will be especially detrimental for countries exporting industrial commodities. Already, oil demand has plummeted and other commodities such as metals, rubber, and platinum are in decline.
This paper reviews the economic literature on the effects of the COVID-19 pandemic, estimating the cost and effects of the disease. It also documents the initial conditions, with a focus on the labor market channel. It then describes countries’ attempts to reduce the costs of COVID, and the role played by international financial institutions in providing assistance. Finally, it reports preliminary accounts of the global economy’s losses and gains.
Unemployment rate in non-industrialized countries
A low unemployment rate does not necessarily mean people are living in a favorable environment. According to a report by the International Labor Organization, 3.3 billion people worldwide are working under substandard conditions and face little opportunity for advancement. In some countries, a job search may take over a year. However, the rate of unemployment in developing countries is even higher. In order to make this information more useful to the global economy, we must examine the definition of unemployment in each country.
The International Labour Organisation (ILO) has developed guidelines for categorizing individuals into different labour market states. These guidelines have been adopted by most industrialized countries and a large number of developing countries, and allow the ILO to compile comparable labour market statistics. But there are still many countries that lack reliable data and do not report their unemployment rates. Thus, the unemployment rate in non-industrialized countries is a misnomer, and the ILO is calling for more efforts to reduce it.
Impact of trade liberalization on global economy
The political economy of trade is the process of lowering trade barriers by negotiating with partners. Liberalization efforts require a reciprocity among trading nations to be successful. In order to be successful, countries must have enough markets to tip the internal balance. The United States, for example, agreed to abolish textile quotas in return for the European Union’s expansion. European countries cooperated in both ventures, enabling global and regional efforts to increase trade liberalization.
Among the biggest threats to a free trading system are the Asian giants. The United States is the key player in the trade negotiations, but most countries have accepted the case for liberalization. Japan, for example, has grudgingly participated in all GATT rounds while access to its markets is very truncated. China, meanwhile, has not committed to minimum reforms required to become a WTO member.
Impact of climate change on global economy
The impact of climate change on the world economy depends on how quickly nations respond to the threat of rising global temperatures. Recent extreme weather events and rising sea levels have already caused severe damage, and agriculture is at risk. Yet standard economic projections of climate change have been conservative. Early estimates suggested mild effects on the world economy. While these estimates have been revised more recently, the damages associated with climate change remain modest for most temperature ranges.
Countries that have the least economic resources and are most vulnerable to climate change suffer most. For example, in Central Africa, the Philippines, Indonesia, and Thailand, GDP per capita is already -13.6% lower than it would be without global warming. By 2100, all of these countries will be suffering from over -70% of their current GDP. The countries with the most advanced economies, such as the US and Europe, will be least affected.
