Recent reports from Reuters have noted that US economic conditions are not exactly in good stead. This is worst depreciation of US economy after 1982 as per financial reports of fourth quarter of 2008 fiscal.
Much of present economic conditions of US could be blamed on exports that have been falling steadily. In US consumers have restricted their expenditures. Both these factors have played a significant role in sordid economic conditions in US.
According to latest information on economic conditions at US national economy depreciated at a rate of 6.2 percent for 2008 fiscal. During January 2009 it had been calculated by Commerce Department that in final quarter of 2008 economy of US depreciated at a rate of 3.8 percent.
As far as economic conditions for US are concerned present state of affairs would be continuing in first half of 2009 fiscal as well. However, economic experts have also reiterated that they expected such conditions beforehand and thus these results were not as shocking as they would be otherwise.
In latest information on economic conditions in America it has been seen that stock markets in US have been hit hard by global economic downturn. This has been indicated by its various stock indices like Dow Jones Industrial Average for example that have declined at an alarmingly sharp rate.
US economic conditions have been affected further by declining levels of consumer expenditures. As per estimates of Commerce Department in fourth quarter of 2008 fiscal consumer expenditures went down by 4.3 percent. This decline also had an adverse effect on gross domestic product of USA. In January 2009 rate of depreciation in consumer expenditures was 3.5 percent.
Problems in US economic conditions have been compounded by fall in exports that are major sources of revenue for US. In 2008 exports of US went down at a rate of 23.6 percent. In economic reports for 2008 it had been estimated that exports in USA had gone down by 19.7 percent.
Losses to tune of $19.9 billion had been made in inventories section in US. Investments in business sector of American economy have gone down by 21.1 percent in 2008 fiscal to add to problems of present US economic conditions.
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Ever since its unification as a nation state in 1932, the Kingdom of Saudi Arabia has been an oil-dominated economy. Most improvements and setbacks in its economic and social indicators can be invariably traced to the ups and downs of the oil market.
While that kind of volatility in revenues is unhelpful, dependence on petroleum would not ring too many alarm bells if it was sustainable. But it is not. Oil and the revenues it generates – 90% of all government income – will dry up at some point in the future, and the economy could collapse unless it diversifies.
Professor at Columbia University. Recipient of the Nobel Memorial Prize in Economic Sciences in 2001 & the John Bates Clark Medal in 1979. Author of "Freefall: America, Free Markets", "The Sinking of the World Economy", "Globalisation and its Discontents" & "Making Globalisation Work".
Chancellor of the Exchequer of the United Kingdom from 1992 to 2007. Prime Minister of the UK between 2007 and 2010. Inaugural 'Distinguished Leader in Residence' at New York University. Advisor at World Economic Forum
CEO and co-CIO of PIMCO. Served as President and CEO of the Harvard Management Company for 2 years, while also working at the IMF for 15 years. In 2008, his book "When Markets Collide", won the Financial Times award for Business Book of The Year in addition to being named as the one of the best business books of all time by The Independent.
Mario I. Blejer is a former governor of the Central Bank of Argentina and former Director of the Center for Central Banking Studies at the Bank of England. Eduardo Levy Yeyati is Professor of Economics at Universidad Torcuato Di Tella and Senior Fellow at The Brookings Institution.
QFINANCE is a unique collaboration of more than 300 of the world’s leading practitioners and visionaries in finance and financial management, covering key aspects of finance including risk and cash-flow management, operations, macro issues, regulation, auditing, and raising capital.
James W. Harpel Professor of Capital Formation and Growth at the John F. Kennedy School of Government in Harvard University. Director of Program in International Finance and Macroeconomics at the National Bureau of Economic Research.