The Economic Impact On The Economy - 2326 Words

The economy is most develop in the US and Europe. When the crash happened in 2008, Europe economy fell into recession extremely. Until today, it has yet to fully recover. Compare with the US that remains the economic giants. After nearly 10 years of economic recovery, we can see long term effects in banking, politics, housing and employment. So, what has been going on politically and economically in Europe? And what will we estimate about the economy of the US and Europe prospect 5 plus years from now? The right answers are not simple, so let me explain. First at all, what has been going on politically and economically in Europe? How does it compare with the US? We knew about the finance and economic crash of 2008, the worst in over 75†¦show more content†¦So the most basic way to revitalize an ailing economy is to ease monetary policy, as the US Federal Reserve did in the fall, but interest rates in the US and Europe is already extremely low, and central banks have already injected unprecedented amounts of liquidity into the credit markets. Thus, the impact of any further easing will probably be small. The slowdown in Europe is expected to be every bit as severe European consumers is spending less to the same reasons American consumers are. The financial sectors of European countries, relative to those countries’ GDPs, have suffered even more damage than that of the US. According to the media, the British government reported a contraction of its economy last fall, and the Eurozone countries are now officially in rece ssion. We know about the damaged Western banks, which had consistently supplied credit to business in the developing world, have abruptly stopped providing it. Eastern European countries that had been running exceptionally large current account deficits and had built up substantial foreign debts are particularly hurting. Hungary, Latvia, and Ukraine are prominent example, and Hungary and Ukraine have already secured emergency loans from the IMF. In Russia, the plunge in oil and other commodity prices has caused a near collapse of the rubber and of local share prices. The government of President Dmitry Medvedev has